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After welcoming the historic moment, it is time to think about where the future lies.
Written: 7
At 21:42 on December 16, Beijing time, Bitcoin broke through the 20,000 USD round mark, and the single currency market value exceeded 390 billion USD. Three years ago, at the moment when the 20,000 mark seemed to be readily available, perhaps no one would have thought that it took three years for this moment to arrive. And 15 hours after this historic moment, Bitcoin’s rising pace is still continuing. As of the time of posting, Bitcoin has completed the further breakthrough of the 21,000 USD mark, temporarily reported to 21,800 USD, and the single currency market value has exceeded 400 billion USD. .
Bitcoin daily chart (Coinbase BTCUSD)
What happened in the market 15 hours after breaking 20,000?
Bitcoin continued to rise after breaking through 20,000. In the past 15 hours, it has again achieved nearly 2,000 US dollars in growth performance, with a phase increase of over 9%, and it took 5 days for the market to achieve a similar increase before the 20,000 mark.
Bitcoin 1-hour chart (Coinbase BTCUSD)
The accelerated rise after the market breaks has caused the market to rise sharply. Take the Binance BTC/USDT single trading pair as an example. Within two hours of 21:00 and 22:00 yesterday, the single-hour trading volume of the trading pair hit a new high in nearly two weeks. , The single-hour trading volume exceeded 10,000 bitcoins, and in the following 15 hours, the 1-hour average trading volume of the trading pair also reached three times the average trading volume during the high shock period of the past two weeks.
Bitcoin 1 hour chart (Binance BTCUSDT)
According to the data monitored by CryptoQuant, the Bitcoin circulation activity of mainstream exchanges has risen sharply during this period. According to incomplete statistics, in the past 15 hours, the total amount of inflows of Bitcoin in mainstream exchanges exceeded 55,000, and the total amount of Bitcoin outflows from exchanges The amount is about 51,000, and the inflow and outflow value accounts for about 0.3% of the total circulation. If the lost and long-term uncirculated bitcoins are excluded, this proportion will rise to nearly 1%. This means that in the past 15 hours, 1% of the “real circulation” bitcoins on the market have been circulated on the exchange.
Bitcoin inflow from the exchange (source: CryptoQuant)
Bitcoin outflow from the exchange (Source: CryptoQuant)
According to skew statistics, in the past 15 hours, BitMEX bitcoin contract quotations have experienced a continuous premium over Coinbase spot quotations, and the peak premium level in the early morning hours approached 0.3%, which has reached a fairly high level from a mid-to-long-term perspective. At the same time, BitMEX contract opening and closing and liquidation data also showed a highly active market.
BitMEX Bitcoin contract holdings (source: skew)
BitMEX Bitcoin Contract Price vs. Coinbase Spot Premium Rate (Source: skew)
The traditional financial market was also quite turbulent overnight. After the Fed’s interest rate decision was announced, Fed Chairman Powell reiterated in a press conference that he would not raise interest rates in advance until U.S. inflation returns to normal, and if necessary, the Fed can expand bond purchases and adjust The duration of the bond purchased. The Fed’s unconcealed concerns about the uncertainty of the economic outlook and the challenge of no actual progress in epidemic control have led to market risk aversion again. Powell bluntly said that the ultimate factor supporting financial stability is a strong economy. The current overall financial stability situation is mixed, which directly pushes up the price of gold.
Overnight, gold rose by more than US$20 to recover yesterday’s decline and set a new high in nearly a week. The US dollar rebounded briefly and then retreated all gains. This morning, it once again approached the 90-round mark, continuing to set a new low since April 2018.
USD Index DXY daily chart
A Bloomberg report today pointed out that One River Digital Asset Management, a hedge fund backed by hedge fund manager Alan Howard, has bought more than $600 million in Bitcoin and Ethereum. And promised to continue to increase its holdings, and is expected to increase the Bitcoin and Ethereum holdings to 1 billion US dollars in early 2021. When the market became accustomed to the entry of traditional financial institutions and legendary fund managers into the cryptocurrency market, we were one step closer to the “time” that belonged to Bitcoin.
Where is the market going?
Estimating with the independent KYC of mainstream exchanges and the number of independent wallet addresses on the chain as a benchmark, we can conclude that the global penetration rate of the Bitcoin “concept” is about 1.5%. Estimated according to the growth rate in recent years, this proportion is expected to be It will reach the level of about 2.5% next year.
Bitcoin adoption rate (Source: woobull.com)
According to the law of the innovation adoption curve, this means that Bitcoin is expected to complete the first stage of “Innovators” next year and usher in the second stage of “Early Adopters”, and follow the curve From the perspective of the law, the second stage will be the stage of rapid development of the corresponding concept. For Bitcoin, the real explosion may have just begun.
Rogers innovation adoption curve
The first decade of Bitcoin’s birth has provided early participants with a considerable return on investment, and the consensus upgrade brought about by this market performance has in turn become the most solid “value support” for Bitcoin today. .
The return on investment of Bitcoin vs. stocks of large companies in the past 10 years (Source: HowMuch)
Taking into account the asset scarcity and natural deflationary characteristics of the theoretical upper limit of Bitcoin of 21 million, supplemented by the relative valuation of Bitcoin, Guggenheim Chief Investment Officer Scott Minerd once pointed out that the theoretical price of Bitcoin should reach 400,000 US dollars.
A recent research report by Citigroup entitled “Bitcoin: Gold in the 21st Century” also pointed out that the current Bitcoin market is highly similar to the gold market of gold in 1970, taking into account the subsequent bull market performance of gold , Bitcoin is likely to usher in an explosion in the next year, and it is expected that the price of Bitcoin will reach $318,000 next year.
According to a report recently released by JP Morgan Chase, institutions ranging from family offices and wealthy investors to insurance companies and pension funds are slowly adopting Bitcoin. Although these institutions are unlikely to deploy Bitcoin on a large scale, even a small switch to Bitcoin can have a significant impact.
The President and CEO of Strategic Wealth Partners pointed out that Bitcoin may become the Tesla of 2021. It is also predicted that the price of Bitcoin will reach the level of $40,000 before the end of 2021.
Although the topic of “institutional cattle” is no longer new, considering that institutional funds are still participating in the market under the premise that they are greatly restricted, and the Bitcoin ETF that the market really expects has not yet landed, the traditional financial market is for the cryptocurrency market. The “blood transfusion effect” of China still has a lot of room for imagination. From 2017 to 2020, the “consensus upgrade” is still the largest and most valuable change in the market.
Daisy, a senior analyst at Huobi Research Institute, said that Bitcoin has once again made history. It can be said that the market consensus has finally been fulfilled. Bitcoin’s development from being widely questioned to being gradually accepted by the mainstream and even admired is the result of historical opportunity catalyzed. After the Bitcoin halving, the long-term halving effect of a long-term reduction in supply has once again appeared, but considering that Bitcoin has gradually become compliant and market products are gradually improved, this round of rise has already had a more solid foundation. In addition, the current trend of Bitcoin and gold has begun to gradually decouple. In the short term, the safe-haven value has almost realized the curve overtaking of gold. The feature of decoupling from traditional assets has become a highlight of Bitcoin, and mainstream institutions’ attitude towards Bitcoin Transformation is a very good support for long-term healthy development. However, it should be noted that after the 20000 break, the continuity of the market’s accelerated rise in FOMO sentiment is doubtful, and subsequent risk control still cannot be ignored.
Market analysts simplified the currency market analysis and said that graphically, the current rising angle between the Bitcoin daily chart and the conversion line and the bullish momentum of the cloud itself actually have no obvious signs of turning. The previous sustained rise is for the indicator. Scalability provides a great help. Considering the current cloud thickness, there is basically no change logic in a short period of time. Therefore, the current indicator judges that the upward trend of the lower daily line is temporarily safe. In addition, after Hash Ribbons issued a positive signal at the beginning of the month, the market has once again fulfilled its trend. Under the background of the continuous opening of the two lines, the continuity of the short-term market continued to rise is still worth looking forward to. Do not blindly fight against the trend in the strong phase, and follow the trend while persisting in risk control.
Bitcoin daily chart (Binance BTCUSDT)