Bitcoin price hits new high as crypto market matures

The price of Bitcoin (BTC) officially hit a new high on December 1 above $ 19,892 after nearly three years, according to data from Coinbase and Tradingview.

Despite the Thanksgiving crash last week, the price of BTC managed to rebound throughout the weekend. BTC then easily passed the $ 19,000 mark on Monday to hit its all-time high, albeit on a few exchanges.

There are three key trends that have fueled the rise in BTC from under $ 3,600 in March to over $ 19,892. These include rising institutional demand, declining selling pressure, and BTC resilience throughout 2020.

Data suggests institutional demand has propelled the rally

Most on-chain data points show that demand for Bitcoin from institutions is growing rapidly.

In November, Grayscale recorded unprecedented net inflows, and the CME Bitcoin futures market saw its open interest climb by nearly $ 1 billion.

Grayscale, in particular, said more institutions invested in cryptocurrencies during the third quarter of 2020 than ever before.

The numbers Grayscale sees are important in gauging institutional interest in Bitcoin, as the Grayscale Bitcoin Trust is typically the first entry point for most institutions to gain exposure to BTC.

In the United States, there is no exchange-traded fund (ETF) for Bitcoin and other major cryptocurrencies. Therefore, the Grayscale Bitcoin Trust is the closest investment vehicle to an ETF in the US market. The Grayscale report said:

“More institutions invested in 3Q20 than ever before and increased their average allocation from $ 2.2 million in 3Q19 to $ 2.9 million in 3Q20. Institutions that are comfortable with multiple products within the Grayscale product line have on average nearly double the single-product investor commitments during 3Q20. “

As Cointelegraph reported in August, MicroStrategy bought $ 450 million worth of BTC, adopting Bitcoin as its primary treasury asset. This was probably the spark that sparked the current wave of institutional demand for the digital store of value.

This was accompanied throughout the summer by high profile allocations to Bitcoin from Square, Paul Tudor Jones and later Stanley Druckenmiller, which only further fueled the positive sentiment in the market. .

I call this painting “The Traditional Assault”.

We have been talking about “The Herd” for over 3 years. The herd needs cover against occupational risks. That’s it.

They are not, by definition, early adopters, but their pockets are deep and their capital is sticky. #Bitcoin has only just begun. pic.twitter.com/jC7uVBXxxW

– Travis Kling (@Travis_Kling) November 30, 2020

In November, Druckenmiller explained that Bitcoin is likely to stay here because it has significantly outperformed gold in 2020, saying:

“It has been around for 13 years and with each passing day it is resuming its stabilization as a brand.”

Low influx of whales

Six months after the halving, November also saw weak selling pressure from whales, according to on-chain data. In other words, the amount of Bitcoin sent to exchanges by wealthy investors steadily declined throughout the month.

CryptoQuant CEO Ki Young Ju identified the whale trading ratio as an indicator of long-term bullish market sentiment. he said:

“Dear $ BTC shorters, You can call me a moon boy, but unfortunately there won’t be massive dumping like in March of this year. The whale exchange ratio (MA at 90 days) is still very low. Long-term optimization is inevitable. “

The weak selling pressure on BTC helped support its rally throughout the month, ultimately allowing the dominant cryptocurrency to reach an all-time high.