Key Factors Pushing The Bitcoin Price To A New All-Time High
The Bitcoin price is on the verge of a new all-time high after reaching its highest YTD price of $18,932 on November 20, 2020.
It’s the highest Bitcoin price since December 2017 and is now just under $1000 away from its ATH of $19,863 on December 17, 2017.
The recent surge in price has been phenomenal. In the last week, the Bitcoin price is up 16%. In the last month, its up 44.81%. In the last 3 months, the BTC price is up 61.32%. And since the start of the year the Bitcoin price is up a staggering 162%.
And with this momentum in a Bull Run, Bitcoin is ignoring all the bearish technical signs as it verges on a new all-time high.
Key off-chain factors such as eased selling pressure is behind Bitcoin’s surge, as more invetsors than ever are buying Bitcoin to hodl.
Added with institutional demand and new institutional-grade infrastructure launching, it’s all pushing the BTC price to an imminent new all-time high.
Institutional Demand For Bitcoin Is Higher Than Ever
Institutional demand for Bitcoin has never been higher. There are several Bitcoin funds, but nowhere near enough for ‘the wall of money’ that Real Vision CEO, Raoul Pal says is coming into the Bitcoin space.
The demand for Bitcoin has been growing and it was inevitable this year would see more. However, MicroStrategy putting $425 of its liquid treasury into Bitcoin brought the demand up to a whole new level.
MicroStrategy CEO Michael Saylor shocked the world with the size of the purchase, and in doing so made Bitcoin the talk in every single boardroom across the globe.
When asked in an interview if other CEOs had contacted him about his strategy to buy Bitcoin Gigachad Saylor said,
‘I can’t mention no names, but let’s just say I have more friends than I ever had before contacting me.’
Square Inc. followed shortly after with a $50 million Bitcoin purchase led by their Bitcoin Bull CEO Jack Dorsey.
Dorsey is also the CEO of Twitter, and the social media giant is touted as being the first large public company to announce it has Bitcoin as part f its treasury.
Billionaire Mike Novogratz said he believed next year will be even better than this year. The Galaxy Digital CEO said,
‘Bitcoin is now an institutional asset. Period. The good thing is most institutions aren’t in yet. It’s why 2021 will be as good or better than 2020.’
And with the likes of Paul Tudor Jones, Bill Miller, and Stanley Druckenmiller all advocating Bitcoin this year the demand for BTC from the biggest names is rising.
This corporate and Wall Street interest is surely behind the Bitcoin price surging towards a new all-time high, and as new infrastructure continues to roll out we are likely to see $20k ATH dwarfed.
Institutional-Grade Infrastructure Is Better Than Ever
We have had institutional-grade Bitcoin funds such as Grayscale (GBTC) and Coinshares with its many Bitcoin trading products for several years now.
But even at around $12 billion AUM combined Grayscale and Coinshares have that Bitcoin “cult” feel to them. Something the larger institutions won’t likely touch.
The larger the institution, the more they need their trusted friends on Wall Street. And when it comes to financial giants, it doesn’t get much bigger than Fidelity.
The Boston-based money manager launched a Bitcoin fund in August 2020. The fund is open only to qualified investors through family offices, registered investment advisers and other institutions, with a minimum investment of $100,000.
And with the Bitcoin price up almost 45% since August, it’s apparent the drive for Bitcoin exposure through firms like Fidelity is driving the BTC price up.
And with the banks’ Bitcoin narrative starting to change just in time for US banks opening Bitcoin and crypto services in Q1, it’s looking like hodling right through next year is going to be a sage move.
More Hodlers Than Ever Before Are Driving The Bitcoin Price Towards New ATH
There are more Bitcoin hodlers than ever as investors take over from traders to ease the BTC selling pressure.
Most traders wanting to sell Bitcoin have to deposit the BTC in their exchange account, and when exchange reserves drop, it indicates there is low selling pressure in the market.
And according to market analysis firm Glassnode, Bitcoin balances on exchanges has dropped 18% since the start of 2020.
Added with BTC liquidity continuing its downtrend, it’s clear the desire to sell Bitcoin is low.
This is backed by a recent report by Grayscale, which confirmed the move from speculating to hodling was apparent.
The Hodler vs. Speculator Index (HSI) showed a highly bullish divergence, as the number of holders relative to a small number of speculators in the market was growing. At a rate not seen since early 2016, some 18 months before the 2017 cycle peak.
There Are Many Factors Pushing Bitcoin Price To A New All-Time High, And Beyond
The rise in Bitcoin price has been exciting, but not exactly shocking to those who are well informed of macro and on-chain factors.
The bull market was expected, and it’s right on cue. The narrative is also changing as banks and financial giants race into the Bitcoin space to get their piece of the pie.
2018 was supposed to be the year the institutional money flooded Bitcoin, but we were two years too early with that prediction.
2020 has been phenomenal for Bitcoin as institutions start to peak their interest, and a new ATH is likely.
But as 2021 rolls out, key factors are pointing towards new and much higher all-time highs.
Author: Pablo Clarke
What is the point of Bitcoin?
Bitcoin is a decentralized money. A money that nobody can control or manipulate, and a money that nobody can print and devalue. It’s also not necessary for any third party to verify transactions, so it makes it much faster and cheaper to send value. It’s also money built on the Internet: a society of almost 5 billion people.
Why should I buy Bitcoin?
Bitcoin is a peer-to-peer money that nobody can manipulate. It’s all set in the Bitcoin codebase which is secured by hundreds of thousands of computers all around the world. Bitcoins can be sent by anybody and no third party is need to verify the transactions, and nobody can stop Bitcoins being sent
Can you buy less than 1 Bitcoin?
Yes. Every Bitcoin can broken down into 100 million bits. They are known as satoshis, after the pseudonymous creator Satoshi Nakamoto. And some companies will let you buy as little as $1 worth of Bitcoin, which at time of writing is worth about 11,000 satoshis. There are many companies that have a system for dollar cost averaging (DCA). This is a great way to buy Bitcoin, and is known in the space as ‘Stacking Sats’. Basically, what you do is set up small automatic, recurring payments to buy Bitcoin (or sats), and you DCA over time.
How can I make money with Bitcoin?
There are many ways to make money with Bitcoin. The most obvious way is to mine Bitcoin. Bitcoin mining is the process of verifying transactions, and helping to secure the Bitcoin network. Bitcoin miners are rewarded with bitcoins for their work.
A Bitcoiner since 2017 and a Bitcoin Maximalist since 2018, Tommy is our main writer and editor at Bitcoin Maximalist. Other than researching and writing about Bitcoin, Tommy loves spending time with his family and supporting his beloved Leeds United.