Bitcoin Back at $18K, Why This Rally is So Different From 2017

bitcoinBitcoin is back over $18,000 again and the momentum does not look like slowing down any time soon. Analysts are largely in agreement that this rally is very different from the 2017 one, and here’s why.

A recent report by analytics provider Chainalysis has delved into the charts and metrics to conclude that this rally is very different from the one three years ago.

The research stated that Bitcoin’s price is rising because the demand for it is increasing at a time when there are relatively few of them available to buy. BTC is much more illiquid today as investors do not want to sell it. It added that the amount held in illiquid wallets is much higher than in 2017, currently representing 77% of the 14.8 million Bitcoin mined that hasn’t been categorized as lost.

That leaves a pool of just 3.4 million Bitcoin readily available to buyers it stated.

Institutions Commeth

Institutional investment is a massive game changer. During the previous bull run, the demand came from individuals and retail traders with some knowledge of cryptocurrencies whereas today, large investment funds such as Grayscale are gobbling them up.

“The institutional move into cryptocurrency appears to be driven by a desire to hedge against macroeconomic uncertainty, which of course hasn’t been in short supply this year.”

The charts indicate that there are much higher net inflows to exchanges this time around, especially in North America. Additionally, there are many more fiat to crypto avenues today than three years ago when there were just a handful of exchanges dealing with fiat.

The report concluded that the market was much more mature now than during the ICO boom of 2017 and even Ethereum has cemented itself as the foundation of a new decentralized financial landscape.

Return of the FUD

Just as was the case during the 2017 bull run, the mainstream media has started to disseminate fear, uncertainty, and doubt once again. As noted by Cane Island Alternative Advisors manager, Timothy Peterson, big names such as the Financial Times and Fox Business are spreading FUD.

There will always be the Bitcoin detractors such as gold bug Peter Schiff, and Nouriel Roubini but they cannot deny the demand for the digital asset at the moment for those that believe in decentralized investments and a store of value.

At the time of press, BTC was trading at $18,150 and looking to top Wednesday’s high.

The post Bitcoin Back at $18K, Why This Rally is So Different From 2017 appeared first on Coingape.

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