That’s what Bitfinex CTO Paolo Ardoino claims, according to which there are still many institutional investors who have not yet entered this market, and who are watching it precisely to decide how to move.
„The turbulent cryptocurrency markets have left traders guessing what the next price move will be. Every move in Bitcoin is now being watched closely by a growing audience of institutional investors who are still trying to grapple with the possibilities offered by an asset that was the preserve of a small band of technologists just a decade ago. As Bitcoin Revolution captivates, the future becomes even brighter for all those who hold the new digital gold.“
This scenario actually assumes a growing market demand for BTC, while there is another that shows a reduction in supply.
80% of Bitcoin off the market
In fact, Melis reveals on Twitter that right now almost 80% of all existing BTC would be out of the market.
The chart comparing the volumes of liquid BTC with illiquid BTC, i.e. those that are held in the wallet without being used, reveals that only about 3 million BTC over 18.5 million are highly liquid, i.e. traded regularly on exchanges, with about 1 million liquid BTC, and the remaining 14.5 million illiquid.
Moreover, until early 2020 the volume of liquid BTC was increasing, but over the past year the trend has reversed, and now they are decreasing.
Suffice it to say that a year ago there were about 3.5 million highly liquid bitcoins, with almost 1.5 million liquid BTC, and only just over 13 million illiquid BTC. In other words, illiquid bitcoins in the last twelve months have increased more than 10%.
If this trend continues, we can expect a further increase in price.
For example, according to Pantera Capital, the price of bitcoin could increase by more than 200% in the next eight months, and reach $115,000 by August 2021. However, it also argues that the 2021 rally could be different than the 2017 rally.
Pantera founder and CEO Dan Morehead said:
„The image of cryptocurrencies is strong right now. About six months ago Bitcoin’s market capitalization was the same as L’Oreal Cosmetics, now it’s gone to that of Facebook, and that’s a huge difference in how the market perceives Bitcoin.“
Pantera co-CIO Joey Krug added.
„It’s quite different than 2017. The high-level fundamentals for 2017 were that there weren’t really a lot of fundamentals, most projects were just an idea on a piece of paper, most things hadn’t been launched, most things didn’t have live products.“
So the scenario has changed a lot from four years ago, both within the crypto sector and across the global financial landscape in general. However, the underlying dynamic that drives bitcoin’s price up, as demand increases and as its supply is inelastic to the market, remains, and will remain forever.