2020 Bitcoin ATH Unique to 2017, Tells a Different Story

In the last hours of November 2020, the price of Bitcoin hit a new all-time high of $19,891. It’s a slight rise from the previous record of $19,766 but it is surely an indicator of the strength the cryptocurrency space has muzzled thus far. It also tells a different story of what was the case then and now, and what is likel to come.

Before the new record, the general consensus has been that a crypto bull run – this time – would be different from 2017’s due to the maturity of the market, a slew of institutional investments that have been announced and an array of evidence-based blockchain-related projects whose impacts are now being felt in various sectors. From PayPal joining the crypto fold to stimuli packages being introduced by major economies in the wake of the Covid-19 pandemic pushing inflation higher, there have been more reports of interest in Bitcoin as an hedge.

What’s unique about 2020 Bitcoin ATH
Its ascent to an all-time high has also been linked to the mainstream acceptance it is gaining as a payment method even as its boom “represents a shift in the market” which has typically been dominated by investors in East Asian nations like China, Japan and South Korea to “North American investors who have been the bigger winners in the 165% rally this year.”

Reuters notes that weekly inflows of Bitcoin to platforms serving mostly North American users jumped over 7,000 times this year to over 216,000 BTC worth $3.4 billion in mid-November as it notes that “East Asian exchanges have lost out.”

“This bull market is quite unique; reflexivity [being the notion of investors not willing to sell as price climbs, creating a feedback loop] is increasing,” states crypto analyst Willy Woo who recently joined Jimmy Song and others to work on launching a new feeless Bitcoin exchange. “Contrary to belief, Bitcoin was not very reflexive during past bull runs, old hands would sell into price rises.”

Data speak for a sustainable growth
According to GlassNode, November saw a total of US$126 billion settled on the Bitcoin blockchain – or a volume of 7.7 million BTC exchanged in the month. It is not the highest on record but the third highest with the last two happening ín a close margin between the end of 2017 and early 2018.

It is significant because, coupled with the fact that the number of unique addresses (those that were active in the network either as a sender or receiver) didn’t grow exponentially with the price rise unlike the 2017/2018 scenario – almost 19.6 million and also the third-highest value – the November 2020 record is prone to accommodate a sustainable growth.

As the new ATH is reached, GlassNode notes that 100% of the circulating Bitcoin supply is in profit even as the Miner Unspent Supply (mined BTC that has never been moved) continued to be on an upwards trend since the crash in March. At the same time, its data shows that the number of “wholecoiner” addresses (those holding at least one BTC) per year reached its highest.

Earlier, the analytics firm had recorded that the number of Bitcoin whales (entities holding at least 1,000 BTC) has reached a new ATH after more than four years.

Yet, Woo is still bullish for the coming year as GlassNode data suggests that Bitcoin liquidity is being scooped off spot exchanges. He surmises that the ongoing re-accumulation phase coincided with the longest and deepest depletion of Bitcoin inventory from spot exchanges in the cryptocurrency’s history.

Publication date: 
12/03/2020 - 12:17
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