On Dec. 8, exactly one month ago, Bitcoin was hovering around the $18,700 range, with many analysts debating as to whether the flagship asset would be able to sustain its bullish momentum and cross its all-time high value close to $20,000. Well, how quickly things have changed since then because within a period of just 30 days, Bitcoin (BTC) has repeatedly scaled up to new ATHs, even surpassing the $41,000 barrier.
Over the course of the last seven days, BTC has exhibited a substantial growth of around 41%, with the digital asset seemingly breaking new ground with each passing day. However, this has led to investors becoming increasingly nervous since there are many who immediately are given flashbacks of the 2018 crash that resulted in most cryptocurrencies crashing hard within a matter of days.
In this regard, Cointelegraph Markets contributor Michaël van de Poppe believes that while 2020 was an amazing year for crypto, everyone should brace for a “healthy correction” in the near future. That being said, for many, that can serve as an opportunity like no other because there is an increasing population of budding crypto enthusiasts who now want a piece of the action, and not just Bitcoin. On the matter, van de Poppe opined: “The higher Bitcoin goes, the more money comes into the market and more money can flow towards altcoins.”
What’s causing BTC to soar?
The reasons for Bitcoin’s momentum are manifold, starting with the fact that the industry as a whole had been in a prolonged bear market all through 2018 and 2019, but despite the slumps, accumulation had never really stopped.
Another often overlooked narrative is related to the recent BTC halving, as time and again, historical data has indicated that approximately four to six months after every cycle, the value of the premier digital currency takes a sharp upward turn — something that has happened this time around as well.
Not only that, but the digital asset seems to be right on track with the stock-to-flow model, which was created by Dutch institutional investor PlanB. According to the S2F model, scarcity is used as the defining metric to quantify the value of Bitcoin. And while most people use the setup to assess BTCs future valuation, PlanB claims that the S2F model can also be used in relation to gold and silver, as well as other assets.
— PlanB (@100trillionUSD) January 7, 2021
Ben Zhou, CEO of cryptocurrency exchange Bybit, confirmed that it’s the “institutional inflow fueling Bitcoin,” adding that there is now a level of consensus, or at the very least, peer pressure among certain corners of the institutional world to have Bitcoin in their portfolio: “Certainly, those that have a younger clientele feel the need to increase their exposure to BTC.”
Omar Chen, CEO of the ZB.com exchange, believes that institutional buying has simply served as a catalyst for Bitcoin and has not been…