, 3 years ago
Many investors probably looked a bit incredulous when Bitcoin revisited the $20,000 mark in December 2020. BTC took a total of 3 years to revisit the old all-time high, and it only took a few days to reach a new all-time high.
Right now, the bitcoin price is in a correction after a fabulous rise to just over $24,000. But how did this happen and why did it take so long? In today's article, we get to the bottom of what led to this price rally in recent weeks.
Bitcoin has a long history of different cycles that the market goes through again and again, marking a new all-time high at their respective peaks. This is followed by a year-long correction that finds its final low on average at around -80% from the previous all-time high.
The first cycle peaked in 2013, when the Bitcoin price reached 1300 US dollars on some trading venues. After that, it first went steeply downward and then only sideways for a long time before BTC finally reached the old record again in 2016.
The following year, 2017, saw the brilliant rally that peaked just below 20,000 US dollars. After that, a long correction followed and so the circle is closed and we are on the threshold of the next bull market, which is expected in 2021.
While these observations are true, it is not necessarily possible to predict from past price action how BTC will behave in future. One observation can be made, however, and that is the growing interest in Bitcoin by institutional investors.
In the meantime, MicroStrategy has invested over 1 billion US dollars in Bitcoin and Elon Musk also flirted with the idea of betting on Bitcoin via Twitter. But a $100 million investment by MassMutual also openly puts up for debate whether an influx of insurers and pension funds will soon bet on BTC.
This buying interest was the driving factor behind the price rally in 2020, and many experts agree that this effect could extend in 2021. Here, everyone also agrees that Bitcoin's mathematically assured scarcity is the driving factor behind the interest. This manifests the idea that Bitcoin is first and foremost a digital store of value that is highly speculative but has better overall properties than gold.
May 22, 2023
Every year the Bitcoin community is celebrating the fact that somebody bought two pizzas online. This looks a little bit strange at first glance but it is one of the most important moments in Bitcoin’s history. What is Bitcoin Pizza Day all about and why is everybody celebrating it?
May 22, 2023
The guys who self-identify as the Taproot Wizards - Eric Wall and Udi Wertheimer - entered the main stage of Bitcoin Miami to loud cheers. After their short and silly wizard dance, the panel discussion started in earnest. But not everyone in the Bitcoin community is a fan of their quirky attitude and projects.
May 19, 2023
We wrote about it earlier: Jason Lowery believes Bitcoin could become the world's reserve currency and that countries should engage in a peaceful "arms race" to mine Bitcoin. He believes Bitcoin is a form of digital property that will be defended similar to how navies secure maritime thoroughfare. Not everyone is sold on this concept. Let's discuss a contrarian view.
May 18, 2023
Stablecoin issuer Tether (USDT) in its recent reserves report reveals that the company holds approximately 52 thousand BTC, worth a respectable $1.5 billion. This is only a fraction of its total assets but signals an interesting potential trend of institutions allocating a piece of their capital to Bitcoin.