Report said that the price of Bitcoin (BTC) has crossed $20,000 on December 16 for the first time in a historic milestone.
It has been reported that the price has reached $23,800 on December 17 and the rally is different from 2017’s due to several reasons that could help BTC soar even higher.
However, these include growing institutional demand, the increasing perception among investors that BTC is a store of value, and stronger network fundamentals.
The report said that in December 2017, data suggested retail and mainstream investors were behind the Bitcoin rally. At the time, CME BTC futures had just launched and there was a lack of institutional investment vehicles.
Likewise, the rally was mostly fueled by retail investors, which came to an abrupt stop after a strong whale-induced sell-off.
This time, institutional investor-focused platforms are seeing an explosive increase in trading activity, as the CME BTC futures market (for example) recently notched a $1.27 billion open interest, ranking just behind OKEx as the second-largest in the global Bitcoin market.
#Bitcoin price hits $20,000 for the first time in history https://t.co/RRpPMqedo3 — Cointelegraph Markets (@CointelegraphMT) December 16, 2020
According to the sources, Institutional investors are not likely to invest in Bitcoin with a short-term strategy. Many are increasingly viewing it as a digital store of value and an alternative to gold.
MicroStrategy, the publicly-listed company in the United States that purchased $450 million worth of BTC earlier this year, sparked a trend that has led other institutions to allocate their capital into Bitcoin. The perception of BTC as a hedge against inflation and a stable store of value could make BTC compelling for the broader financial sector in the medium to long term.
Thus, Michael Saylor, the CEO of MicroStrategy, said:
“Bitcoin is the world’s best treasury reserve asset and the emerging dominant monetary network. It is the solution to the store of value problem faced by every individual, corporation, and government on earth. As this news gets out, the world is going to change for the better.”