The price of Bitcoin just hit $20,000 for the first time ever in a historic milestone for the world’s most popular cryptocurrency.
The price of Bitcoin (BTC) hit $20,000 for the first time in history on Dec. 16. The monumental landmark comes just over two weeks after it broke its previous all-time record.
At the same time, this rally is distinct from the 2017 rally owing to a variety of factors that might enable BTC to get much bigger.
This involve growing institutional interest, increasing investor expectations that BTC is a store of investment, and better network fundamentals.
Data revealed that institutional and mainstream buyers were behind the Bitcoin surge in December 2017.
At the moment, the CME BTC futures had just begun and there was a shortage of retail investment vehicles.
As such, the rally was largely fuelled by institutional buyers, who came to an abrupt halt after a heavy whale-induced sell-off.
This moment, retail investor-focused exchanges are seeing an explosive rise in trading volume.
For eg, the CME BTC futures market has recently drawn $1.27 billion in open interest, ranking only behind OKEx as the second-largest in the world's Bitcoin market.
Institutional buyers are reluctant to participate in Bitcoin for a short-term approach. Some increasingly see it as a digital store of value and an alternative to gold.
As Cointelegraph stated earlier, the spike in the Grayscale Bitcoin Confidence premium indicates that institutions are steadily finding exposure to BTC and paying beyond the spot market price for privilege.
Both banks and high-net-value holders are beginning to consider Bitcoin as a store of value and a treasury commodity.
MicroStrategy, a publicly-listed corporation in the United States that acquired BTC worth $450 million earlier this year, also ignited a movement that has prompted several institutions to devote their money to Bitcoin.
The view of BTC as a buffer against inflation and a safe store of value could render BTC appealing to the wider financial sector in the medium to long term.
Michael Saylor, Chief Executive Officer of MicroStrategy, said:
"Bitcoin is the strongest treasury reserve asset in the world and the new powerful monetary network. It is a solution to the value-added problem faced by every person, every company, and every government on earth. When this news comes out, the environment is going to transform for the better."
Around the same time, Bitcoin's success this year has once again dwarfed gold as well as the S&P500's, despite the yellow metal and the latter breaking their own all-time peaks this year.
So it's no joke that Wall Street is treating Bitcoin more seriously now than it did in 2017. Further proof of this was disclosed on Dec. 3, when the S&P 500 confirmed intentions to roll out their own blockchain benchmarks next year.
As Cointelegraph reported, Bitcoin’s fundamentals are stronger than ever as the network is now moving $500,000 per second around the globe. In other words, Bitcoin transfers $4.627 billion in value per day.
The network is also ten times more secure than in late 2017, as the hash rate and mining difficulty both continue to hit new highs this year.
The hash rate indicates how much computing power is being dedicated to validating Bitcoin transactions and securing the network.
