Forex and Crypto News

Bitcoin price in 2017 vs. 2020

19:57 17 November /2020

Today, the pair BTC/USD has risen above $17000 for the first time in three years. At the time of publication, the pair BTC/USD is trading around $17800. Thus, since the March collapse, the price of Bitcoin has increased by 360%. And this movement began to resemble the movement of the pair BTC/USD pair in 2017. Then the pair BTC/USD rose from $800 to $19000 from January. The only difference between the price increase in 2017 and now is institutional capital.

In 2017, the price of Bitcoin grew due to the development of ICOs. And investors started buying BTC and ETH as their instruments for buying tokens of new projects. But often, young projects, having received BTC, sold them and were not going to implement their projects. Thus, the rise in the price of Bitcoin in 2017 was more speculative than fundamental.

This year, the rise in the price of Bitcoin is supported by fundamental data. The main factor behind the growth was the covid-19 pandemic. Central banks are making lending cheaper to support businesses and the employment rate. Also, stimulating measures increase the level of inflation, which reduces the exchange rate of the world's main reserve currency, the US dollar. And accordingly, the purchasing power of the American dollar decreases.

Accordingly, investors began to buy Bitcoin as the main refugee for capital after gold. Paul Tudor, Stan Druckenmiller, MicroStrategy, and Square have begun building their bitcoin reserves.

ten17-3.jpegBitcoin net transfer volume to/from exchanges. Source: Glassnode

And apparently, soon we will see continued growth in the price of Bitcoin. With the rise in the price of bitcoin, capital outflow from exchanges increased. There is less money flowing into trading platforms, which suggests that traders are eager to store bitcoins instead of exchanging them for other assets.

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