The difference between the bull market of 2017 and the one we are living in 2020

The scenarios between one and the other are opposite, in 2017 speculation reigned, in 2020 institutional adoption.

Bitcoin (BTC) briefly reached $13,000 on October 21, 2020 for the first time since 2019, before falling below the mark. The cause of the sudden price increase is probably the news that PayPal is introducing Bitcoin call options.

Bitcoin reached $12,000 on October 21 and advanced about $13,200 before being corrected to $12,860. Since then it has been going up and down at the $13,000 mark.

2017 X 2020, what has changed in the Bitcoin ecosystem?
Professional traders increased their short positions when the price of Bitcoin passed $12,000, show data

The basic difference between the increase in 2020 and the increase in 2017 is in the scenario. In 2017, there was a great uproar around Bitcoin, driven by the nascent ICOs that moved large sums of money and attracted the attention of many investors who saw ways to capitalize and speculate with new cryptomon currencies.

Two years ago, the crypto-market was flooded by ICOs that launched new digital currencies that promised to decentralise several sectors, from social networks to cloud computing. Investors expected one or more of these currencies to explode to challenge Bitcoin’s dominance.

3 key metrics and the disinterest of professional traders point to a possible mass sale at the current price of Bitcoin
But none has taken off since then. Bitcoin now has 67% of the market value of crypt coins, according to Coinmarketcap.

When the boom passed in 2018, both Bitcoin and the entire crypt market declined bitterly throughout the year, allowing the market to grow without the pressure of speculation. In 2019, Bitcoin spent the entire year fluctuating little and stagnated in the $7,000 range, after a boom that took it to $13,000 and then lost steam and stagnated.

The biggest change in the last two years is the institutional focus on Bitcoin. The assets are under the attention of major institutional players such as Fidelity, Square, the Chicago Mercantile Exchange and since yesterday, Paypal.

The world scene has also changed considerably, giving Bitcoin the opportunity to stand out in a scenario of crisis and uncertainty, brought about by the Covid-19 Pandemic.

Interest in Bitcoin and the entire market for Blockchain technology now comes from two areas – corporations like Facebook that want to use the Blockchain technology that supports Bitcoin to create their own currencies, and governments that want to create digital currencies guaranteed by their own treasuries, the CBDCs.

The question now is: Will major digital currencies like Bitcoin be decentralized, supported by companies like Facebook’s Pound, or controlled by governments like China’s crypto-currency plans? The political instability caused by the trade war between China and the United States may accelerate the issuance and adoption of sovereign digital currencies.

It is important to cite halving as a major event and its medium to long term impact on Bitcoin. On average, between 6 and 18 months after halving, we have historically seen a significant gain in value. Therefore, it is expected that in the coming months, Bitcoin will begin to give even higher marks.

The effects of halving on Bitcoin price

The hash rate as effect and cause of Bitcoin price
If we look at the correlation between the hash rate and the price of Bitcoin so far, we see a strong increase in the hash rate that followed a strong increase in the price of Bitcoin.

It’s important to note that the hash rate has increased considerably in recent months. The Hash Rate on October 20th is 149 TH/s, which is more than 10 times the same period in 2017.

This means that miners are constantly buying new equipment and joining the network, believing that despite the decline in the distribution of rewards, mining will remain profitable.