Bitcoin Market Looks Like Early 2016 Just Before Bitcoin Price Exploded
Bitcoin, along with the broader cryptocurrency market, has come alive over the past few months.
The price of bitcoin, after crashing below $4,000 per bitcoin during the broad coronavirus crash in March, rebounded to around $12,000, boosted by some high-profile investors betting on bitcoin.
Now, bitcoin and cryptocurrency asset manager Grayscale said that “the current bitcoin market structure parallels that of early 2016 before [bitcoin] has begun its historic bull run,” which means the price of bitcoin could rise significantly.
“Amid unprecedented monetary and fiscal stimulus, investors are looking for ways to hedge against an ever-expanding money supply,” Grayscale research director Phil Bonello wrote in a report titled Making Sense of the Value of Bitcoin, describing different ways to value bitcoin.
“Because of bitcoin’s unique qualities, such as its verifiable scarcity and a supply that cannot be controlled by a central authority, we believe it can be exploited as a store of value and a way to escape this great monetary inflation. .”
A number of investors, including famed Paul Tudor Jones, have turned to bitcoin in recent months to combat the inflation they see coming in the wake of the unprecedented coronavirus stimulus measures that the US government and the Federal Reserve have used to support the economy.
As a result, bitcoin’s price hit its highest level since June last year and sparked a fresh wave of confidence among bitcoin investors that it may return to all-time highs.
Bitcoin soared to around $20,000 per bitcoin at the end of 2017 after starting the year below $1,000, propelled by a retail investor gold rush that some believe may be restarting.
“Bitcoin’s recent price action has really taken off from the $10,000 level, indicating market confidence in the big move at the end of July,” Joe DiPasquale, managing director of the bitcoin and crypto-based hedge fund, said via email. in San Francisco, BitBull Capital, adding bitcoin. struggling to firmly clear the $12,000 “hurdle” may be “necessary for the market to cool down and catch its breath.”
“Going forward, we can expect the market to rely on the support zone between $11,000 and $11,500 to consolidate and attempt a further push above $12,000.”