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Since May 2020, the price of Bitcoin has seen some bullish increases, now boasting double the price compared to the first half of the year. Looking at the price before the May halving, the Bitcoin price gained more than 110%, offering a possible bullish bullish trend towards the end of the year.
Throughout the year, Bitcoin mostly enjoyed healthy growth, despite a bit of a decline in March. In January, the cryptocurrency held a value of $ 7,200 USD before falling to around $ 5,200 USD in March. In May, Bitcoin saw a recovery and was looking at just above $ 8,500 USD and since then the token has seen a steady rise to a knock on the door of $ 18,000 USD currently.
Source of the chart: CoinMarketCap
According to a report by Chainalysis, much of the surge could be attributed to the halving given the timing and levels of liquidity in the market. As reported by the analyst firm, the price of Bitcoin is rising, in a nutshell, due to increased demand and limited supply (which is more difficult to increase due to the halved reward for mining the token) .
“The price of Bitcoin is rising because the demand for Bitcoin is increasing at a time when there are relatively few Bitcoins available for purchase. While the total supply of Bitcoin grows every day as more is mined, the actual amount available for purchase depends on whether the holders want to sell or trade it. “
The rise of institutional investments
As Chainalysis pointed out, one of the biggest differences between this bull run and the big rally in 2017 is who is buying Bitcoin. In 2017, the main demand for Bitcoin came from individuals or retail investors looking to buy and make a profit using their own capital and personal funds. Additionally, investors ranged from experienced traders to those with little or no knowledge of cryptocurrency.
Now, however, there has been a massive shift towards institutional investors looking to buy Bitcoin to hedge against the dollar. With a massive increase in purchases from companies like Grayscale and Square, the demand for Bitcoin has increased dramatically. As a positive for Bitcoin’s price, institutional investors don’t seem to be slowing down the amount of cryptocurrency they are buying.
