By CCN Markets: Bitcoin, the asset written off by many prominent economists after an enormous fall last year, has surged by more than 115% in the first half of 2019. The world’s largest cryptocurrency in May established a year-to-date high of $9,090 on Coinbase exchange. The price corrected downwards by more than $1,000 afterward. However, the drop did not shake bitcoin’s long-term bullish bias, at least according to Barry Silbert, the founder, and CEO of Digital Currency Group. Silbert told Bloomberg that crypto spring has arrived. He’s been in the crypto market since 2011 and is used to the volatility.
“[We’ve] been through quite a roller coaster. Price has gone down 80% four times. But in the past four times, the price has hit record highs afterward. And so if you look at the price for bitcoin, it looks like perhaps we’re coming out of the crypto winter and we’ve entered the crypto spring.”
According to Silbert, the market has responded positively to apparent demand from venture capitalists and institutional investors. The crypto bull noted that none of the bitcoin’s previous price rallies had the same optimism.
“If you compare the infrastructure today relative to where it was right before the last bitcoin bull market in 2017, it’s really night and day. And so now the question is not if institutional money is going to move into the asset class, but the question is really when.”
In retrospective, the surging demand for bitcoin tokens recorded in 2017 was mainly because of the so-called ICO-mania. People purchased the cryptocurrency to use it as a tool to invest in blockchain startups. However, as more than 90% of them failed, they started recovering their losses by selling the bitcoins they had raised through crowdfunds. The move eventually brought the price down by more than 75% in 2018.
But, as Silbert noted, the market has already moved away from the ICO-mania phase.
Fidelity Has Helped to Bolster Sentiment
Fidelity Investments, one of the world’s largest asset management firms, announced in May that it would roll out a bitcoin trading service for its institutional clients. The move closely followed the company’s earlier decision of offering bitcoin custody solutions. It indicated that more prominent firms are beginning to cater to Wall Street’s growing appetite for cryptocurrencies.
Announcements such as those helped to improve the sentiment in the bitcoin market, more than 90% of which remains retail-only. According to a report published recently by Diar, the number of investors holding between 1 and 10 BTC increased in Q1 2019. According to the report:
“Retail size wallets between 0-100 Bitcoins have also seen a 126k increase in Bitcoins. And, a continuous upward trend to the number of addresses. Overall, these addresses hold, as of date, 38% of Bitcoins circulating supply.”
The year’s rally so far has taken the bitcoin market capitalization to $145 billion. At its lowest last year, the valuation was close to $61 billion.
Disclaimer: The views expressed in the article are solely those of the author and do not represent those of, nor should they be attributed to, CCN Markets.