3.4m bitcoin (BTC) are readily available to buyers as demand increases, blockchain analytics specialist Chainalysis said, noting that first-time BTC buyers and buyers looking to unload fiat currency for BTC as a hedge against worrisome macroeconomic trends are responsible for much of the current demand. Meanwhile, Rick Rieder, BlackRock‘s Chief Investment Officer of Global Fixed Income, said he thinks that BTC “could replace gold to a large extent.”
According to Chainalysis, right now, the amount of liquid, or trader-held BTC is similar to what it was during the 2017 bull run. But the amount held in illiquid wallets, controlled by investors, is much higher, representing 77% of the 14.8m BTC mined that isn’t categorized as lost, meaning it hasn’t moved from its current address in five years or longer, they added.
On average, around BTC 1.715m changes hands on crypto exchanges per day in November, or slightly less than in October. Hover, compared to the first 19 days of November last year, when BTC dropped from above USD 9,000 to USD 8,000, the average trading volume decreased by 41%.
Meanwhile, this year, according to Chainalysis, demand is increasing as evidenced by rising inflows to exchanges and trade intensity on exchanges.
Also, the team of researchers said that, in 2017, most demand came from individual, retail investors buying with their own personal funds, many of whom had varying degrees of experience with and knowledge of cryptocurrency.
“As anyone who reads the news can tell you, 2020 is the year institutional dollars began flowing into bitcoin,” they said, adding that this trend appears to be driven by a desire to hedge against macroeconomic uncertainty.
Today, BlackRock’s Chief Investment Officer of Global Fixed Income told CNBC that BTC is “much more functional” than gold and the most popular cryptocurrency could replace the yellow metal. At the end of last year, BlackRock had USD 7.4 trillion in assets under management.
“It’s hard to say whether it’s [#btc] worth the price it is trading at today. But do I think it is a durable mechan… https://t.co/XIiQLGQzFd
— Squawk Box (@SquawkCNBC)
Meanwhile, the data also shows an increase in high value transfers sent from exchanges in 2020.
“Exchanges have sent 19% more transfers worth USD 1m or more in 2020 while bitcoin’s price has been over USD 10,000 as compared to 2017. That suggests that the individuals behind these transfers have more money to spend, as we would expect when bigger investors get involved,” they said.
Today, Managing Director at major crypto asset management firm Grayscale, Michael Sonnenshein, said that their team “scoped up over USD 188m into Grayscale Bitcoin Trust alone, yesterday.”
BTC trades at USD 18,719 (16:38 UTC) and is up by 4% in a day and 16% in a week. The price rallied by 46% in a month, 145% in a year and is 7% away from its all-time high of USD 20,000.
“If the selling pressure increases on the back of traders locking in their profits, the price could easily drop toward USD 16,000. However, if the motive force of bitcoin’s uptrend is strong enough, the BTC/USD cross rate could break above USD 18,200 in a relatively short time,” Greg Waisman, Co-Founder and Chief Operating Officer of Mercuryo.io, a cryptocurrency payment ecosystem, told Our.
According to him, moving past USD 19,892 will in its turn be another step toward setting new historical highs at the 127.2% and 141.4% Fibonacci retracement levels sitting at USD 24,500 and USD 26,830, respectively.