There are many investors feeling validated in the cryptocurrency market now that Bitcoin’s price has established a new all-time high of $34,778.
The last time Bitcoin (BTC) traded anywhere near this level was during the bull run of 2017, when it reached a peak of about $19,783. Even the mainstream media took notice, including the New York Times, which observed that the current rally had “a very different feel to it than the last time around.”
Many in the cryptocurrency community would agree. Therefore, it’s essential to take a deeper look at the factors that are driving the current rally.
The “average Joe” is no longer running the show
Bitcoin hits a new all-time high with a very different feeling to it than the last time around. https://t.co/N5M4EzblOW
— Nathaniel Popper (@nathanielpopper) November 30, 2020
In 2017, Bitcoin’s bull run was largely believed to have been fuelled by retail investors who were placing speculative bets on a nascent BTC market and other smaller-cap cryptocurrencies from the initial coin offering craze.
At that time, there were reportedly millions of retail investors in South Korea, Japan and China that became a force in the market. Back then, it was the “average Joe” powering Bitcoin’s more-than-1,300% gain that year, as pointed out in the Wall Street Journal by IG Group chief market strategist Chris Weston.
U.S. dollar trading increases as Wall Street arrives
Fast forward to 2020, and the investor landscape has changed dramatically. Institutional investors, who largely remained on the side-lines in the first bull run, have been the face of the rally this time around.
These investors are largely expected to take long-term holding positions with no intentions of selling anytime soon. They are also flocking to the Bitcoin futures markets, where open interest on the Chicago Mercantile Exchange recently surpassed $1 billion, and they are…