Bitcoin has risen by more than 120% in half a year. 12 reasons why Bitcoin has risen for 11 consecutive days

Text | Dong Wenxian Chen Xiangming

Produced by | Mars Finance APP

As of May 12, Bitcoin has risen for 11 days, marking the longest consecutive rise since 2017.

Following yesterday's efforts, Bitcoin once again hit a new high this year - $7,513, up more than 120% in half a year. This is the first time Bitcoin has returned to the $7,000 mark since September 2018. Led by the strong performance of Bitcoin, mainstream digital currencies have risen one after another, and the global digital currency market value has exceeded $200 billion.

In previous reports, Mars Finance APP summarized the five major reasons for the rise of Bitcoin, namely: the entry of giants such as Fidelity, JPMorgan Chase, TD Ameritrade, and Facebook, the Bitcoin halving effect, the relaxation of third-party market supervision, the general bullish market sentiment, and the general decline in stock markets in various countries, which led to an increase in investors' risk aversion.

Bitcoin has continued to rise recently, reminiscent of the market when Bitcoin exploded in 2017. Starting from mid-November, Bitcoin surged from $6,000 to nearly $20,000 in more than a month. Crypto analyst FlibFlib also mentioned the similarities between Bitcoin's price trends in 2017 and 2019 in a recent tweet.

Will Bitcoin really repeat the trend of 2017? What is the driving force behind Bitcoin's rise? In addition to the five reasons mentioned above, blockchain media EWN has selected 12 reasons to further explain the logic behind Bitcoin's rise.

Bitcoin production reduction expectations

Last November, Bitcoin fell below the price range of $6,250 to $6,800 that it had maintained since mid-September, and once fell to a low of $3,200. This plunge intensified the market's panic over Bitcoin, and the cryptocurrency market thus ushered in the biggest crash in history. But as of now, Bitcoin has returned to its highs, even briefly exceeding $7,500.

Considering the long decline in 2018, Bitcoin's return to $7,000 is destined to be recorded in the history of cryptocurrency market. Although a pullback is not ruled out, if Bitcoin's rise continues, the next price point worth watching may appear between $8,500 and $9,950.

We have to talk about the impact of Bitcoin halving. After the first two halvings, the current Bitcoin block reward is 12.5 BTC. When the third halving occurs in 2020, the block reward will be 6.25 BTC. Historically, Bitcoin prices have risen sharply before and after Bitcoin halvings. According to the Byzantine consensus algorithm, the best time to buy BTC is about a year before the block reward halving.

Financial giant Fidelity enters the market

According to Bloomberg, US investment company Fidelity will launch a Bitcoin trading service for institutional clients in the coming weeks. Fidelity Digital Assets, Fidelity’s cryptocurrency-focused subsidiary, will participate in the service, Bloomberg said.

Fidelity is one of the world's largest asset management companies, managing more than $2.4 trillion in assets. Fidelity's entry into the crypto market will not only promote the public's awareness of the investment value of cryptocurrencies, but will also bring a large number of institutional investors to the market.

The secret layout of the two major US brokerage firms

Similar to Fidelity, two of the four largest stock brokerage firms in the United States have also secretly laid out their plans for the Bitcoin trading market. As the second largest Internet brokerage firm in the United States, TD Ameritrade, the news began to spread when it tested the launch of Bitcoin trading. Later, there were reports that the online trading company E*Trade was also preparing to provide crypto asset trading services on its platform. It is reported that E*Trade will first provide BTC and ETH trading, and will later add other crypto assets. This news was also confirmed by Bloomberg.

OTC capital is ready to move

OTC capital is also eager to invest in Bitcoin. Apart from the financial institutions that have been secretly laying out, the OTC funds represented by retail investors may still be worried about the aftermath of the bear market and remain on the sidelines. But when they see the bottom forming, they will consider re-entering the cryptocurrency market. As it turns out, Bitcoin reached a bottom of $3,200 in December last year. Investors are returning.

"FOMO" investors worry about missing out on investment opportunities

There is a psychological phenomenon in the investment market called "fear of missing out" (FOMO). The psychologist who created this concept believes that most investors have a FOMO mentality and are worried about missing out on important investment opportunities.

Is Bitcoin an important investment opportunity at this stage? TRON founder Justin Sun recently wrote on Twitter, "Never buy too late. The best time to buy Bitcoin, except 10 years ago, is now."

As the most important currency in the cryptocurrency market, Bitcoin has always been dominant. In this round of market rise, Bitcoin's share of the market was close to 60%, sucking a lot of money from altcoins. But today the market situation has changed, and altcoins have begun to catch up. BCH, which is in the top ten of cryptocurrency market capitalization, even recorded a 24-hour increase of more than 20%. When mainstream media began to report the huge market changes of Bitcoin and altcoins, investors with "fear of missing out" would accelerate their entry.

Bitcoin once again proves it is not a "tulip bubble"

Another important reason is that people who were skeptical of Bitcoin before have begun to realize that Bitcoin has real value. People who think Bitcoin is a "tulip bubble" may also be wondering if they are wrong.

The recovery of Bitcoin has once again proved to those who doubt it that Bitcoin is convincing enough, whether as a value storage carrier similar to gold or as a value exchange carrier. On Twitter, someone even launched a campaign to call on people to abandon gold and embrace Bitcoin.

Facebook is also entering the market and is about to issue a stable currency

Since December last year, Facebook has been repeatedly reported to be about to issue a stablecoin. In this regard, there are at least three views in the market:

The first view is that Facebook's stablecoin is just a "conventional product" of its economic ecosystem, which is completely different from the "crypto product" that advocates decentralization.

The second view is that Facebook's stablecoin will be the killer of Bitcoin, as Facebook has a huge user base worldwide.

The last view is that Facebook's stablecoin will allow mainstream people to understand and get in touch with cryptocurrencies, and the cryptocurrency market will move towards the mainstream.

The market is discussing the threat of Facebook's coin issuance to Bitcoin, but an important piece of news has been overlooked - in February this year, when the New York Times reported on Facebook's coin issuance plan, it was revealed that Facebook was in communication with exchanges about listing the coin. If the coin is successfully listed, more than 2 billion global users connected by Facebook may enter the world of cryptocurrency. From this point of view, Facebook's coin issuance is a major positive and one of the reasons for the rise of Bitcoin.

Sports giant Nike may also issue a coin

The eighth reason may not have been noticed by many people, but it is as important as Facebook's coin issuance, that is - Nike's entry into the cryptocurrency market.

Nike reportedly submitted a patent document to the US Patent and Trademark Office on April 19. The document shows that Nike applied for a trademark for the term "Cryptokicks". According to the description in the application document, Nike will develop a cryptocurrency wallet app and operate an online footwear and clothing market around cryptocurrency.

Nike’s patent filing also outlines plans to provide crypto assets to community members, allowing them to conduct transactions using “unconventional currencies.”

The cryptocurrency market is maturing

After the recent Bitfinex-Tether $850 million scandal and the Binance theft in the cryptocurrency field, the market panic did not affect the price of the currency. Not only did the market not fall sharply, but it quickly broke through $6,000 and $6,200 in the next two days. This shows that after many negative events, the crypto market is becoming more mature.

Blockchain activities are held intensively, and the industry is gaining popularity

New York is the financial leader in the United States and an important financial capital in the world. In the past period of time, New York has attracted many core players in the blockchain field. Recently, blockchain industry conferences are being held intensively in New York, further increasing the market heat.

Blockchain companies Moore and ConsenSys are both important organizers of the New York Blockchain Conference. Although some figures have dropped compared to last year, it is no coincidence that this industry event coincides with the strong rise of Bitcoin.

Bitcoin on-chain transaction volume

According to Diar data, the transaction volume on the Bitcoin chain in April this year has approached the historical high of 11.2 million set in December 2017. Diar said that the upgraded SegWit isolated certification protocol has fixed the scalability of transactions, and the transaction volume on the Bitcoin chain has increased by nearly 250% per month.

Traditional investment markets such as stocks are performing poorly

The S&P 500 suffered its worst performance this year last week, with both the S&P 500 and the Dow Jones Industrial Average falling more than 2% and the Nasdaq falling 3%. Bloomberg, a well-known financial media, also shifted its focus from the Sino-US trade war to the sluggish stock market.

On the other hand, the cryptocurrency market behind Bitcoin is performing in a completely opposite manner to the stock market.

Over the past week, mainstream investors have noticed that Bitcoin is performing in the exact opposite direction of the stock market. While the stock market is trending downwards, Bitcoin is doing the exact opposite . For those who haven’t invested yet, this is another reason to choose Bitcoin. If the 11 reasons mentioned above are not enough, the fact that the cryptocurrency is performing differently from other investments is enough to prove that it has the potential to become a new investment.

When Bitcoin broke through $7,000, John McAfee, the founder of the well-known antivirus software McAfee, wrote on Twitter : "Bitcoin has broken through $7,000! The price resistance level predicted by every analyst who was bearish on Bitcoin has subsequently been confirmed to be a daydream of the bears. As I predicted, Bitcoin's rise will not stop."