The price of Bitcoin dipped below the $18,000 USD support level yesterday but the rally is still looking promising despite the drop. It seems as though the increased demand for Bitcoin is as a result of institutional investment firms picking up interest in the token.
Grayscale, for example, has added to its Bitcoin Trust significantly this year, with a massive spike in the fourth quarter. As Pantera reported, the demand for Bitcoin owing to institutional adoption coupled with the limited supply of the cryptocurrency has been a significant catalyst in sending the price of Bitcoin skyrocketing up to surge past barriers of resistance to hit new support rapidly.
2017 Bitcoin rally vs 2020 bullish price spike
Institutional adoption seems to a major force in the new rally of Bitcoin. While retail investors have fresh opportunities to buy Bitcoin, with PayPal and Square offering a convenient platform for cryptocurrency purchases, the leading price drive appears to be coming from the investment firms.
Back in 2017, when Bitcoin hit its current all-time high of above $20,000 USD, investment came from individual investors who were either looking to hold (HODL) cryptocurrency or those facing FOMO and hoping to make a profit off the surging asset. The key difference between this rally and three years ago is linked to those buying Bitcoin. While Bitcoin might still have the connotation of a volatile asset, the token has found stability throughout the course of the year and has experienced healthy growth at a time in the world where the global economy has struggled.
Can Bitcoin expect a bull rally in 2021?
If the cryptocurrency continues to see strong growth and stable support, it’s possible that the token will have a healthy surge next year, bagging – and possibly maintaining – record high values. As Bitcoin bull Michael Novogratz suggested, 2021 will be a “good or better” year than 2020 for the price of Bitcoin:
— Mike Novogratz (@novogratz) November 20, 2020