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Bitcoin is now $23,000. Are you rich?
Bitcoin is already at $23,000, is $100,000 far away?
Do you think Bitcoin will exceed $100,000?
From $3,800 to $23,000, how did Bitcoin rise from the bottom to the top?
Bitcoin broke through $20,000, reaching its highest level since its launch in 2008.
While setting a new historical high, it also ranked 19th on Weibo's hot search list.
As of press time, Bitcoin was priced at $22,736, up 10.23% from the previous day and up 23.5% from seven days ago.
Looking back to 2017, Bitcoin jumped from around $1,000 to a high of $20,052, and then plummeted. Bitcoin has since entered a three-year bear market. This time, Bitcoin has risen to $20,000 again.
From then on, there was no more locked-in Bitcoin.
If we go back to March, at that time, Bitcoin was experiencing an unprecedented black swan: Bitcoin plummeted to US$3,800, and the global cryptocurrency market value was almost halved.
After that, in the next 6 months, the cryptocurrency industry experienced Bitcoin halving, DeFi craze, Ethereum 2.0… After the plunge, Bitcoin embarked on a slow journey of rising.
From $3,800 to $23,000, how did Bitcoin rise from the bottom to the top?
1. The black swan of the epidemic caused Bitcoin to be cut in half
The new coronavirus outbreak broke out at the end of 2019, gradually spread to the world in early 2020, and dealt a heavy blow to global finance, including cryptocurrencies, in March.
On March 12, the U.S. stock market opened low and continued to fall, triggering the third circuit breaker. At the same time, Bitcoin fell from $7,000 the previous day to $5,555 in an instant.
Then on March 13, Bitcoin fell again after a slight rebound, falling to an all-time low of around US$3,800, breaking people's psychological defenses.
Although it has since gradually recovered to around $5,000, the market is still nervous.
In just one day, the total market value of the entire cryptocurrency market fell from around US$228 billion a few days ago to less than US$120 billion, shrinking by about US$100 billion, nearly halving.
Very few people have had such a thrilling experience, which leads to panic and pessimism, and they sell at a loss.
At that time, Mr. Coin was amazed. This epic market situation made him stunned.
Liu Changyong, founder of Zhimi University, told DC News that it is very regrettable that cryptocurrency has gone from being a challenge to traditional finance to a plaything of traditional finance.
Yi Lihua of Laode Capital shouted that staying alive is the most important thing. No matter what assets users hold, they must keep some cash, cash, cash!
After experiencing the two-year bear market in 2018 and 2019, most people were full of confidence and thought that Bitcoin would create a new historical high in 2020 when Bitcoin is about to halve. However, the 312 flash crash was a wake-up call, causing most investors to fall from the peak of hope into the valley of despair.
Trading tests human nature. Perhaps it was difficult for the desperate players to predict that the bull market they were looking forward to would arrive at the end of the year.
2. DeFi exploded, altcoins were in a frenzy, and Bitcoin was bleak <br />Although the damage caused by 312 to Bitcoin was catastrophic, after the plunge, Bitcoin still began to slowly stabilize and recover.
Starting from March 15, Bitcoin began to climb upward from around $5,000, and finally, at 3:40 pm on April 6, it broke through $7,000, reaching a high of $7,431.
Since then, Bitcoin has continued to rise, breaking through $9,000 on May 6, and then fell to around $8,700 on May 11.
On May 12, with the mining of block 630,000, Bitcoin ushered in its much-anticipated third halving.
However, this halving did not bring about the big bull market that the market expected. Bitcoin closed at $8,821.43 that day, up only 2.9%.
In fact, the Bitcoin market remained calm after the halving. On the one hand, the expectation of the halving was fulfilled in advance, and the arrival of the halving actually meant that all the good news had come out.
A more important reason is that after that, the DeFi track exploded and altcoins ushered in a carnival, which indirectly removed the momentum for Bitcoin's rise.
In June, the liquidity mining launched by the decentralized lending platform Compound set the market on fire, with its governance token COMP soaring from a dozen U.S. dollars to a maximum of over 400 U.S. dollars in just a few days.
Subsequently, a number of liquidity mining projects such as YFI and YAM emerged. Throughout July and August, there was no word more popular than DeFi, and no story more exciting than mining.
Although there are negative cases such as YAM’s one-day collapse and CRV’s 95% plunge, the previously declining DeFi has allowed investors to see the value and power of decentralization at this time.
Trading, financial management, lending, with the support of mining, various DeFi protocols have entered everyone's field of vision. The total staked amount of DeFi has increased from about US$1 billion at the beginning of June to US$10 billion in September.
As one of the leading projects, the price of YFI has exceeded US$43,000, creating a miracle of 10,000 times the coin in 2020.
Due to the outbreak of DeFi, the Ethereum network, which is the basis of its development, has fallen into congestion, and the price of ETH has skyrocketed. ETH has risen from around $200 in May to $475 in September, doubling in 4 months.
While DeFi and Ethereum were gaining momentum, some altcoins also saw a short-term upward trend for various reasons. Doge rose 57% due to FOMO caused by a video, and ADA rose by a puzzling 288%.
In contrast, Bitcoin is bleak. From May to September, a full four months, Bitcoin only rose from around US$9,000 to around US$10,500, a four-month increase of only 16%.
Although Bitcoin has performed poorly compared to DeFi coins after the halving, many people believe that the halving of Bitcoin will inevitably lead to an increase in the price of the currency. Judging from the market conditions after the first two halvings, a bull market will occur one year after the third halving.
However, the bull run is not coming that slowly, and the reason has nothing to do with the halving.
3. In an unexpected turn of events, large institutions such as Grayscale have openly entered the market. The bull market is coming, but it is "gray".
While the entire cryptocurrency industry is unable to extricate itself from the DeFi craze, cryptocurrency investment company Grayscale is also quietly making its Bitcoin layout.
After the 312 black swan event, when everyone was in panic and loss, Grayscale not only did not slow down, but instead increased its efforts to buy Bitcoin.
According to statistics, in the three months after April this year, Grayscale increased its holdings of nearly 80,000 bitcoins. By July this year, Grayscale's total bitcoin holdings had reached 400,000.
Just yesterday, December 16, Grayscale Bitcoin Trust announced that it had increased its holdings by 3,628 bitcoins, bringing its total holdings to nearly 570,000 bitcoins.
Data shows that 80% of those who purchased GBTC were institutional investors, and as of November 2020, a total of 23 companies (29 institutional accounts in total) held Grayscale Bitcoin Trust shares. Crypto asset lending company BlockFi is the largest holder of Grayscale Bitcoin Trust, holding approximately 24.2355 million trust shares; the second largest holder is Three Arrows Capital, one of the most active cryptocurrency hedge funds. It is worth noting that hidden among the institutions on this list are accounts of well-known private wealth management institutions or family offices, including the investment company under the famous Rothschild family.
In fact, in addition to Grayscale, since this year, many listed companies and traditional financial institutions have entered the Bitcoin market in a big way, setting off a wave of institutional investment in Bitcoin.
In September, business intelligence company MicroStrategy purchased more than $425 million worth of Bitcoin as reserve assets, and in December it announced the issuance of $400 million in convertible bonds (ultimately $650 million in convertible bonds), making a big bet on Bitcoin.
In November, payment giant PayPal announced that it would fully open the access to Bitcoin purchases to US users and increase the weekly cryptocurrency purchase limit from US$10,000 to US$20,000.
According to data from Bitcoin Treasuries, there are 23 institutions that currently hold more than 50 million US dollars worth of Bitcoin, and the combined holdings of these institutions reach 888,864 Bitcoins.
In addition to buying Bitcoin, commercial organizations have also begun to participate deeply in the trading of cryptocurrencies. Singapore's DBS Bank announced that it will establish a digital asset exchange to provide users with exchange, spot trading and custody services between four fiat currencies (Singapore dollars, US dollars, Hong Kong dollars, and Japanese yen) and four digital assets (BTC, ETH, BCH, and XRP).
Earlier, cryptocurrency commentator WhalePanda tweeted: Every Bitcoin sold now is being bought by a large institutional buyer who is desperately trying to accumulate more Bitcoin below $20,000.
Grayscale CEO Barry Silbert commented “Confirmed”, agreeing with his point of view.
As institutions led by Grayscale continue to increase their holdings of Bitcoin, this wave of rising prices is also called the "Grayscale Bull."
Driven by institutional buying, Bitcoin has entered an accelerated upward channel, constantly breaking new highs.
In the three months from September to December this year, Bitcoin rose from around US$10,000 to US$19,695 on December 1.
At this point, Bitcoin is only one step away from the important psychological threshold of $20,000.
4. Bitcoin breaks through 20,000 USD, creating history
On December 16, Bitcoin’s final push finally came.
At 9 o'clock that evening, Bitcoin surged and broke through the $20,000 mark, and today (December 17) it broke through the $23,000 mark in one fell swoop, reaching an all-time high of $23,850.21.
Bitcoin continues to make history.
Previously, when Bitcoin frequently tested the $20,000 mark and had difficulty making substantial progress, institutions continued to enter the market and the traditional world's attention to Bitcoin was unprecedented.
On December 12, American insurance company MassMutual purchased 5,470 bitcoins for a total of US$100 million.
On December 17, Bloomberg reported that One River Digital Asset Management, a hedge fund backed by billionaire and hedge fund manager Alan Howard, has bought more than $600 million in Bitcoin and Ethereum. It also promised to increase its holdings of Bitcoin and Ethereum to about $1 billion by early 2021.
Previously, Ray Dalio, founder of the world's largest hedge fund Bridgewater, also publicly expressed that his views on Bitcoin have changed.
In his view, Bitcoin and other cryptocurrencies have become a gold-like asset alternative over the past decade. Bitcoin has both similarities and differences with limited supply liquid wealth storage methods such as gold, so it can be used as a diversification investment in gold.
On December 11, Gemini co-founder Tyler Winklevoss also publicly stated that the smartest people are scrambling for Bitcoin and mature investors are boosting the price of Bitcoin.
In addition to the favor of institutions for Bitcoin, the recovery of the international financial market is also a reason for the further rise of Bitcoin.
On December 16, 2020, U.S. time, the Federal Reserve held its December interest rate meeting. The meeting decided to maintain the federal funds target rate unchanged at 0%-0.25% and raised the economic forecast for 2021.
At the meeting, the Fed also stated: "The Fed will not respond to temporary price increases" and "If the scale of bond purchases is reduced, a warning will be issued long in advance."
This move means that the United States will not send out signals of tightening the dollar in the future.
“The Fed meeting reinforced our perception that they will continue to keep monetary policy accommodative for as long as necessary and provide as much ammunition as necessary,” said Brien Lundin, editor of the Gold Newsletter at information technology consultancy.
The release of good news has brought temporary relief to the global financial market and, to some extent, has also dispelled investment institutions' concerns about financial risks.
On December 9, Jiang Zhuoer, CEO of Litecoin Mining Pool, said on Weibo that arbitrage is a one-way porter from the traditional cryptocurrency market to the compliant U.S. stock market. The arbitrage coins deposited in Grayscale are eventually sold to funds in the U.S. stock market that are interested in the coins. Since the COVID-19 pandemic, the funds in the U.S. stock market have been flooding in large quantities and are endless. With the unlimited printing capacity of the Federal Reserve, what will be the result of buying limited coins?
As long as there is a demand for U.S. stock funds to buy coins, they will continue to suck out the coins in the cryptocurrency circle through Grayscale, the porter.
When Bitcoin broke through $20,000, a number of mainstream media including CCTV reported on it. On December 17, CCTV Finance Channel reported that the price of Bitcoin broke through the $21,000 mark for the first time, completely recovering from the three-year bear market and setting a new record high.
The rise of Bitcoin also boosted the performance of blockchain stocks. On December 16, Canaan Technology, Ebang International, Bit Digital, Riot BlockChain and others all opened sharply higher that day. Except for Bit Digital, the other three stocks all closed higher.
In addition, as Bitcoin rises, its market value has exceeded US$390 billion, surpassing the US healthcare giant Johnson & Johnson in one fell swoop.
If Bitcoin can break through $25,000, its market value will reach $460 billion, surpassing retail giant Walmart and being on par with Visa, the world's largest payment processor.
At present, it seems that it is not far-fetched for Bitcoin to break through $25,000. In fact, many players have higher expectations for Bitcoin than that.
Long before Bitcoin broke through $20,000, Messari founder Ryan Selkis mentioned in the "2021 Crypto Investment Theory Report" that the crypto market will usher in a big bull market in 2021. He also expected Bitcoin to reach at least $100,000 by the end of 2021.
Will Bitcoin reach $100,000? Let’s wait and see. (Deep Chain Finance) |
