The bitcoin price, which was trading under $10,000 per bitcoin just two months ago, surged to over $15,000 (before retracing to $14,700 this morning) and many are expecting bitcoin, as well as the booming wider cryptocurrency market, to keep on climbing.
The latest comes some two years after the bitcoin price soared to almost $27,000 per bitcoin back in December 2017, rocketing from under $1,000 at the beginning of the year as bitcoin and cryptocurrency fever swept the world—but data suggests this bitcoin bull run is very different.
Bitcoin exchange deposits have dropped sharply over the last six months, suggesting the latest bitcoin rally isn’t being driven by retail investors, bitcoin and crypto analytics firm Glassnode data revealed.
“During last summer’s rally, we saw highs of over 60,000 unique daily deposits—likely investors taking profit,” Glassnode said via Twitter, adding the decrease could be due to long term bitcoin investors having “fewer incentives to sell.”
“Since then [bitcoin exchange deposits have] decreased by nearly 60%, down to 25,000.”
At the peak of 2017′s epic rally, bitcoin exchange deposits outpaced the bitcoin price, with Glassnode recording around 200,000 daily exchange deposits.
Bitcoin exchange deposits have previously increased along with the bitcoin price, with deposits falling back during bear markets.
However, deposits have continued to slide this year despite the uptick in the bitcoin price, leading many bitcoin and cryptocurrency traders and investors to attribute the latest bull run to long-awaited institutional investors buying up bitcoin.
Despite this mornings drawback, Bitcoin is in a bull market and is not having a bear market rally. Next stop is the highs of last year ($19,500). Two things are driving this:
1) Coronavirus. Bitcoin (BTC) is flight/safe haven capital and the global fear of this outbreak is creating demand for BTC. It is the indicator of the spread or otherwise of this worrying disease.
2) The Halving. Coming in May, likely the 12th, this will drop the mining reward to 6.25 BTC from 12.5. The idea is that this will make bitcoin worth twice what it is now. Maybe it will, maybe it won’t but it certainly won’t make BTC cheaper and if demand for new coins is constant, it will drive the price up over time.
The number of people searching Google for the term "Bitcoin halving" has been steadily rising along with the bitcoin price, analysts at Arcane Research, adding that an increase in searches could be a sign bitcoin's halving will recapture the wider public interest in bitcoin and crypto that catapulted the bitcoin price to around $27,000 in 2017.
The market is looking healthy and ready to expand upon its gains so far this year.