The 2020 bitcoin bull run is very different from that of 2017.
So claims financial journalist Billy Bambrough who recently published an article on his blog on Forbes in which he compares the trend of the price of bitcoin in 2017 with the current one.
In 2017, the price at the beginning of the year was less than $1,000, while in December it peaked at almost $20,000, with an increase of more than 2,000% in 12 months.
Moreover, in the last two months of the year, there was a full-fledged speculative bubble since, from the lows in November 2017, below $6,000, to the all-time high in December, there was an increase of more than 200% in just over a month.
Bambrough talks about an increase of more than 40% in the last few weeks, from mid-December 2019 to the present day, and also points out that many people actually expect the price of bitcoin to continue to rise in the coming months.
The figures, however, show that the recent increases are very different from those of 2017.
First, BTC held on exchanges have declined over the past 6 months, suggesting that this recent rally has not been driven by retail investors at all and that long-term investors are very reluctant to sell at this time.
In contrast, during the peak in late 2017, BTC deposits on exchanges had reached much higher levels, rising as the price rose, the exact opposite of what has been happening lately, with deposits falling despite the price increase.
According to some analysts, the current lack of significant trading volumes resulting from retail investor transactions suggests that the recent increases are due to institutional investors, which was not the case at the end of 2017.
Therefore, the recent price increases should not be treated as the result of a new speculative bubble, but as a structural rise in interest towards the asset.
Bambrough also quotes the recent Grayscale Investments report which shows that it is precisely institutional investors who are leading the raising of funds to invest in BTC.
In addition, many people expect that the May halving could trigger another wave of retail investors’ interest in bitcoin and cryptocurrencies, partly due to the fact that the volume of Google searches for the bitcoin halving query is steadily increasing as the price of BTC itself increases.
Indeed, according to Arcane Research analysts, a return of public interest in Bitcoin, similar to the one that at the end of 2017 brought the price to almost $20,000, could be expected during the following months.
Besides, something similar happened already during the previous halving, back in 2016, so these assumptions can’t be considered risky, although they can’t even be considered certainties.
The only thing that is certain is that the context in which the price of bitcoin is moving now is clearly different from the one in which it rose at the end of 2017.