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The recognition by the mass
By the time of writing this, the whole cryptocurrency market has just gone through a bull run. Almost everyone can’t help wondering if “Bitcoin is the new gold” as Bitcoin hit the All-time high of $63,346 on April 2021. And not just Bitcoin, many other Altcoins also reached their new All-time high during this time. Unlike the bull run in the 2017-2018 Bitcoin bubble, this latest bull run was made by a whole new segment of investors. In the 2017-2018 period, the market was full of Individual retail investors who wanted quick cash grab, trading assets were in and out every day. We could easily notice and called it a bubble bull run. And as the bubble exploded, the price of Bitcoin and other Altcoins fell drastically and remained in a gloomy market till last year.
At the beginning of 2020, the epidemic of Covid-19 unpredictably occurred which led to the crashing of a new financial crisis. People lost their jobs and couldn't pay their bills. Banks had too many bad debts that they couldn't handle, which led to unstoppable inflation. People lost faith in the government and the banks, looking for new ways to invest and make money. Cryptocurrency once again caught the investors’ eyes. But this time, it’s different. Joining in the cryptocurrency market, there are not only individual investors but also lots of endowments, institutional investors, hedge funds, and private corporations.
In March 2021, Paypal started accepting Bitcoin as a payment option for their 25M+ vendors. Elon Musk, one of the wealthiest people in the world, CEO of Tesla, decided to support cryptocurrency and accept Bitcoin as Car’s payment. Not just companies and firms, banks also started investing in the cryptocurrency market. Standard Chartered, BNY Mellon, and Citibank can be mentioned as typical examples. Cryptocurrency can no longer be ignored.
With the joining of whales, the cryptocurrency market now has more holders than traders. Chainalysis reported that 77% of all 14.8 million mined Bitcoin is held in illiquid wallets. This is a substantially more considerable proportion of total circulating Bitcoin than it was in 2017-2018. This is a significant optimistic indicator for Bitcoin since it indicates that long-term value investors rather than traders are holding the cryptocurrency. During a period of negative market movement, value investors are more likely to ride out the storm rather than sell their holdings.
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