When bitcoin surged to $20,000 in 2017, they called it a ‘Moon landing’, but crypto experts are saying that this latest bull run cannot be compared to 2017 and that it has entirely different characteristics.
The report by CCN says that the FOMO amongst retail investors that powered the surge in 2017 is only happening around the periphery of this latest bull run. In 2019, the price rise is being driven by institutional investors.
Crypto analyst SFOX (an institutional investor) wrote in a blog post: “The relatively sustained increase in BTC’s price over the past couple of weeks has many crypto veterans and newcomers alike comparing the state of the market to the bull market of late 2017. But the full picture of the similarities and differences between BTC’s two $11,000+ moments illustrates how far crypto has come in a relatively short time — and where it still has opportunities to mature.”
The report also suggests that the institutions are arriving to cryptocurrencies in waves. It also suggests that if there are similarities between 2017 and 2019 it is in the way that “old school tech companies” such as Facebook and Uber are getting in on the act, with Uber investing in the use of Facebook’s Libra token.
More importantly in 2019, major institutions have entered the blockchain space. A number of banks and other financial industry businesses are using Ripple, while others use Stellar and IBM. Walmart China is using the VEChain platform and Fidelity is bringing its clients to the blockchain.
As CCN says, “These aren’t small, retail buys. These are massive, fund-sized buys.” It adds that this means “the coins actively trading and determining the price will be increasingly limited.
The next move will be determined by supply and demand, and what we will probably see is the market showing a steep rise as people are willing to pay more for less, and less becomes available.
SFOX believes that institutions are currently buying with the expectation, based on fundamentals, that a bull return soon is pretty inevitable:
“In sum, while both the 2017 and 2019 crypto rallies were swift and no doubt influenced by trading psychology factors like FOMO, the data indicate that crypto is markedly more mature now than it was a year and a half ago — and that maturity may suggest that this rally is more fundamentals-driven than the last one was.”