From $3,000 to $23,000 within years - The rise of Bitcoin

 1. Epidemic black swan, Bitcoin cut in half:

 

The new crown epidemic broke out at the end of 2019 and gradually spread to the world at the beginning of 2020, and in March it brought a heavy blow to global finance including cryptocurrencies. On March 12, U.S. stocks opened lower and moved lower, triggering the third circuit breaker. At the same time, Bitcoin dropped from $7,000 the previous day to $5,555. Immediately after March 13, Bitcoin fell again after a slight rebound, falling to a historical low of about $3,800, which also broke people's psychological defense. Although it has gradually recovered since then, rising to around $5,000, the market is still frightened. In just one day, the total market value of the entire cryptocurrency market fell from about 228 billion US dollars in the previous few days to less than 120 billion US dollars, a drop of about 100 billion US dollars, almost cut in half.

 

Very few people have had such a thrilling experience, that they all fall into panic and pessimism and leave the game. At that time, Uncle Coin History was amazed that this epic market stunned him. After experiencing the two-year bear market in 2018 and 2019, facing the 2020 year when Bitcoin is about to halve, most people are complacent and feel that Bitcoin is about to create a record high. And the 312 slumps made the most of investors fall from the pinnacle of hope into the valley of despair. Trading tests humanity. Perhaps the desperate players at the time were hard to predict that the bull market they were looking forward to would come at the end of the year.

 

2. Defi outbreak, altcoin carnival, Bitcoin sad:

 

Although the damage caused by 312 to Bitcoin was disastrous, after the plunge, Bitcoin still began to slowly stabilize and rebound. Starting from March 15th, Bitcoin began to climb upwards from around $5,000. Finally, at 3:40 pm on April 6, it broke through $7,000 and reached a maximum of $7,431. Since then, Bitcoin has continued its efforts. On May 6, it broke through $9,000 and then fell to about $8,700 on May 11. On May 12, with the 630,000th block being mined, Bitcoin ushered in the highly anticipated third halving. However, this halving did not bring about the big bull market expected by the market. Bitcoin closed at $8821.43 on that day, a rise of only 2.9%. In fact, after the halving, the Bitcoin market was not shocked. On the one hand, the expectation of the halving was fulfilled in advance, and the arrival of the halving, on the contrary, was all the benefits.

 

A more important reason is that after that, the Defi track broke out, and altcoins ushered in a carnival, which indirectly drew the momentum of Bitcoin's rise. In June, the liquidity mining launched by the decentralized lending platform Compound detonated the market, and its governance token COMP surged from a price of more than ten US dollars to a maximum of more than 400 US dollars in just a few days. Subsequently, a number of liquid mining projects such as YFI and YAM emerged. Throughout July and August, there was no more popular term than Defi and no more exciting story than mining. Although there are negative cases such as YAM's one-day collapse and CRV plummeting 95%, the previously weak Defi at this time allowed investors to see the value and power of decentralization. Trading, financial management, lending, and mining are supported by various Defi protocols. The total amount of Defi pledged has risen from about US$1 billion in early June to US$10 billion in September.

As one of the leading projects, the price of YFI broke through 43,000 USD, creating a miracle of 10,000 times currency in 2020. Because of the outbreak of Defi, the Ethereum network, which is the foundation of its development, has fallen into congestion and has also ushered in a skyrocketing currency price. ETH rose from about $200 in May to $475 in September, doubling in 4 months. While Defi and Ethereum are working hard, some altcoins have also seen short-term gains due to various reasons. Doge has risen by 57% because of a video that triggered FOMO, and ADA has made everyone confused by 288%.

 

On the contrary, it is the sadness of Bitcoin. From May to September, Bitcoin only rose from about $9,000 to about $10,500 in the entire four months, and the four-month increase was only 16%. Although Bitcoin after the halving has performed poorly in front of Defi coins, many people believe that the Bitcoin halving will inevitably lead to an increase in the price of the currency. Judging from the market after the previous two halvings, the third halving year There will be a bull market later. However, the arrival of the bull market has not been so slow, and the reason has nothing to do with the halving.

 

3. Peaks and turns, grayscale, and other large institutions enter the market:

 

The bull market is coming, but it is "grey". While the entire cryptocurrency industry is unable to extricate itself from the Defi boom, the cryptocurrency investment company Grayscale is also quietly carrying out the layout of Bitcoin. After the 312 Black Swan Incident, when everyone was in panic and loss, Grayscale not only had no footsteps but increased its efforts to buy Bitcoin. According to statistics, in the three months after April this year, Grayscale increased its holdings by nearly 80,000 bitcoins, and by July this year, Grayscale's total bitcoin holdings had become 400,000. Just yesterday, on December 16, Grayscale Bitcoin Trust announced that it had increased its holdings of 3,628 bitcoins, and its total holdings were close to 570,000 bitcoins. Data shows that 80% of GBTC purchases are institutional investors, and as of November 2020, a total of 23 companies (a total of 29 institutional-level accounts) hold shares of Grayscale Bitcoin trust. Encrypted asset lending company BlockFi is the largest holder of Grayscale Bitcoin Trust, holding approximately 24,235,500 trust shares; the second holding position is Three Arrow Capital, which is currently one of the most active cryptocurrency hedge funds.

 

It is worth noting that the institutions hidden in this list include accounts of well-known private wealth management institutions or family offices, including investment companies under the famous Rothschild family. In fact, in addition to the grayscale, many listed companies and traditional financial institutions have entered Bitcoin on a large scale this year, setting off an upsurge of institutional investment in Bitcoin. In September, the business intelligence company MicroStrategy purchased more than 425 million U.S. dollars in Bitcoin as reserve assets. In December, it announced the issuance of 400 million U.S. dollars in convertible bonds (eventually issued 650 million U.S. dollars in convertible bonds), betting on Bitcoin. In November, the payment giant PayPal announced that it would fully open the way for US users to buy bitcoins, and increase the weekly limit on cryptocurrency purchases from US$10,000 to US$20,000.

 

According to Bitcoin Treasuries data, there are 23 institutions that have held more than $50 million in bitcoin so far, and the total holdings of these institutions have reached 888864 bitcoin. In addition to buying Bitcoin, commercial institutions have also begun to participate in cryptocurrency transactions. DBS Bank of Singapore announced that it will establish a digital asset exchange to provide users with four legal currencies (Singapore dollar, US dollar, Hong Kong dollar, Japanese yen) and four Exchange, spot trading, and custody services between various digital assets.

Earlier, cryptocurrency commentator WhalePanda tweeted that every bitcoin sold now is being bought by a large institutional buyer, which is desperately trying to accumulate more bitcoins below $20,000.