Bitcoin has risen 40% in two months. What is the difference between this time and the new high in 2017?

The price of Bitcoin has surged over the past few weeks — up an eye-popping 40% since the beginning of the year.

Just two months ago, the price of Bitcoin was less than $7,000, but it has soared to over $10,000 this week, and many expect that the value of Bitcoin, and the cryptocurrency market, will continue to climb.

The last big surge in Bitcoin prices was about two years ago, when the price of Bitcoin soared to nearly $20,000 in December 2017. When Bitcoin and cryptocurrency fever swept the world, the price of Bitcoin was less than $1,000 in early 2017 - but data shows that this surge is very different.

Data from Bitcoin and crypto analytics firm Glassnode revealed that deposits to Bitcoin exchanges have fallen sharply over the past six months, suggesting that Bitcoin’s latest rally was not driven by retail investors.

“During last summer’s rally, we saw peaks of over 60k daily deposits, likely the result of investors taking profits,” Glassnode said in a tweet, adding that the drop in bitcoin prices could be because long-term investors have “less incentive to sell.”

“Since then (deposits to bitcoin exchanges) have dropped by almost 60% to 25,000.”

At the peak of Bitcoin prices in 2017, the number of deposits into Bitcoin exchanges exceeded the price of Bitcoin, with Glassnode recording approximately 20 deposits into exchanges per day.

Previously, deposits on Bitcoin exchanges increased as Bitcoin prices rose, but fell during the bear market.

(Glassnode: Funds deposited into Bitcoin exchanges)

However, despite the rise in Bitcoin prices, deposits have continued to decline this year, leading many Bitcoin and cryptocurrency traders and investors to attribute the latest bull run to the long-awaited massive buying of Bitcoin by institutional investors.

Willy Woo, partner at bitcoin and cryptocurrency hedge fund Adaptive Capital, said:

“This is a real breakout. Fundamental investment activity is supporting this breakout above $10,000.”

This theory is backed up by new data from Grayscale, the world’s largest bitcoin and cryptocurrency asset manager.

Last month, Grayscale revealed that it had seen inflows of $600 million in 2019, more than from 2013 to 2018 combined, and announced that institutional money was finally entering the cryptocurrency space.

Michael Sonnenshein, Managing Director of Grayscale, said:

“If the question that’s always been there is ‘Where are the institutional investors in crypto?’ The answer is, they are here, and they are there in significant numbers.”

Meanwhile, some expect the upcoming bitcoin halving event, which will cut the bitcoin mining reward received by miners in half in May, to spark another wave of retail interest in bitcoin and crypto.

Google searches for the term “Bitcoin halving” have been rising steadily as Bitcoin prices have risen, with analysts at Arcane Research finding that the search trend is rising.