The market is expecting Bitcoin price increase to be more stable moving forward. The strong bull run in the market leading to an aftermath of over 80% crash may soon come to an end.
This is based on a report done by Patera Capital, a Carlifonia-based hedge fund. According to the report, the frequency and intensity of BTC price drops has decreased as compared to the past.
When we compare the 2013-2015 and 2017-2018, Bitcoin crashed by up to 83% reaching $1111 and $20,089. In the same light, previous bullrun have resulted in high price corrections. This led to retracements of -61% and -54%, respectively.
According to Pantera Capital CEO, Dan Morehead, the future markets will be less severe as there has been a consistent drop in selling after the 2013-2015 and 2017-2018 bearish cycles. The price swings will moderate as the market becomes broader and more institutional investors join the band. More head made the remarks in reaction to the current price swings due to the bullish trends leading to highs of almost $65K.
This is the first time since May that BTC/USD is rallying above $60K as the SEC approved the first Bitcoin exchange-traded fund after a long time of rejecting similar projects.
The approval of ProShare’s Bitcoin Strategy ETF has raised a roar in the market as many institutional investors have high hopes of easy access to the BTC market. This will also lead to high BTC costs in the long run.
Just like the early days, BTC is growing to be a mainstream financial asset especially with the ETF around the corner.
According to the stock-to-flow model, the last bitcoin halving event decreased the Bitcoin issuance rate by 15% of the total supply which led to a 9212% BTC price rally. The second halving event reduced new bitcoin supply by about 30% of the total bitcoin supply, leading to a 2910% bull run. This is like a third of the first bull run hence less impact on Bitcoin’s price.
The latest halving event was in May 2020 which reduced the amount of BTC in circulation, hence affecting the Bitcoin rallying by 720%.
Photo by Nick Chong on Unsplash
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