Bitcoin Forum

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I personally liked that image.

Overall charts shows that bitcoin price is the main driven factor against all charts, except for this chart. (there is an inverse correlation against price and investor/trader ratio, however not as strong as in other charts)

There is a consistent growth of "investors" and a consistent reduce of traders. Which is obviously good for the ecosystem.

But how do they get this kind of data?  Exchange volumes keeps going up, and AFAIK volume is mostly due to trading.

Looks like governments printing money worldwide due to corona virus crisis was definitely good for bitcoin. Most investors and financial institutions are afraid of governments decisions worldwide, and gold and bitcoin are good protection against that.

i don't think trading has ever been considered "good for bitcoin". it has always been the source of all the volatility that we have seen in bitcoin, specially when they added margin trading.

in any case, pretty interesting charts here but i can't help feel like this is mostly guesswork since the main fact they are working with are the on-chain transactions that have high values. that is the classic flaw with basically any other conclusions that chainanalysis has ever made.

I don't think its as black, and white as that. Although, indications have shown the early predictions of holding Bitcoin might not be as positive as originally thought, but I think most people have been aware that value is created when large amounts of Bitcoin are in circulation, i.e being used as a currency. The more adoption in mainstream stores of Bitcoin, will provide greater value for those using Bitcoin. This is usually the case for any currency, but is exaggerated with Bitcoin due to the its limited amount, and nature of it.  Although, trading has always hurt the price of Bitcoin, and any other currency. It creates fluctuations within the market, which creates uncertainty for adoption which is ultimately bad for Bitcoin. I believe there's been several companies that have been vocal that they are not interested in accepting Bitcoin, due to its volatile nature, which is a direct effect of frequent trading. It is less noticable in fiat currencies, because of the volume, but as we know with Bitcoin, there is much less in circulation, and therefore is much more noticeable creating these fluctuations.

When institutional investors and hedge funds jump into bitcoin, a lot of independent traders too jump in. The increase in number of people wanting a piece of the coin would surely increase it's demand and price. But it's still important to realize where the actual value of bitcoin lies. The prices would eventually keep on increasing but it would be a gradual process and the volatility would only be useful for swing traders.

I think it's time to admit that the Lightning Network project ended in failure.  The developers were unable to scale the Bitcoin network. 

The first cryptocurrency cannot be effectively used for settlements between individuals.  There are 7 billion people in the world, and Bitcoin has only 350,000 transactions per day. 

Moreover, Bitcoin is not an anonymous or confidential coin. 

Therefore, it has no advantages over other means of payment.  Based on this, it does not surprise me that in 2020 the main investors in Bitcoin are institutional investors and not individuals. 

Bitcoin is an elite asset, its main value lies in the limited supply of coins, transparent blockchain and ease of use in an unreliable environment. 

I think Bitcoin is the future world reserve currency.

Related article - Deutsche Bank Says Investors Increasingly Prefer Bitcoin Over Gold as Inflation Hedge (https://www.coindesk.com/deutsche-bank-says-investors-increasingly-prefer-bitcoin-over-gold-as-inflation-hedge)

People (not institutional investors) have long been investing in bitcoin because they see it as a store of value that can give them profit over time. The development of Lightning Network to solve the scalability issue that you pointed out isn't for pumping the price but for the increase in usage of bitcoin as a currency. I personally don't think people would buy and hodl BTC even if Bitcoin was scalable, cheap, and offers a good alternative for sending funds.

The chart and the analysis gets related to the present market scenario. We don't know the how the market gonna turn within few months time. Right now more institutional funds have come into the market which has pushed the price forward. In 2017, the growth was related with the Japan providing legal support for bitcoin usage and provided access to stores to accept bitcoin same as accepting payments through credit/debit cards. Even if the market isn't flood with institutional investors, the market would've grown. This is true, because when the entire world market suffered bitcoin stood strong. By the time there is no big flow of institutional funds into bitcoin.

I always knew it would boil down to this the moment the Bitcoin party didn't crash even when it was heavily fudded. Since they couldn't stop or compete with the movement, they had no other choice than to join the bandwagon. Now that major institutions are turning to Bitcoin and other cryptos for digital payments, it won't be long now before we finally get to the apex point and then achieve mass adoption. It's also worth noting that since the block reward was halved, miners have a lot less to sell that could cause a sell-offs.

Some questions has been lingering on mind for the past few days though, would people be willing to pay higher prices for the liquid bitcoins that are available? Or they will take profits if we happen to hit the last all time high.

What is happening in the crypto market today is as a result of a cumulative efforts of both institutional and individual players in the industry. However, there has been a growing interest particularly from quite a number of market leaders such as Facebook and most recently, PayPal, which has hugely impacted on its accelerated growth that we are seeing today. But my worry is the sustainability of this ongoing bull run in the price of bitcoin. I hope all the gains is not going to wipe out unannounced as witnessed at the end of its 2017 bull run.

Well, investors play an important role but we consider also the adaption of big institutions, where they have a bigger reach. Meaning more people are using it and becoming mainstream, it can affect the price and this is what we hoping. Take, for example, Paypal just recently announced to consider include cryptocurrency o their platform, this has a big impact. How about Facebook next? or other big institutions, we are expecting a huge leap from this.

They play a big part but we also should thank the institution that promotes bitcoin, without the public relations aspect, the image of bitcoin could have been tainted and would cause them to lose potential investors. With institutions, big shout out to countries that are leaning in favor of cryptocurrency industry because they can influence far more people as they have authority.

Lol, there is a popular saying "if you can't beat them you join them" I guess the institution have realised they can no longer continue missing out on opportunities so they took the wise decision, support btc, invest on it and watch their invest grow ;D
Mass adoption is inevitable from the influx of institutions and none institutions investing in btc.

This is one of the most interesting reports since a long time. I am focusing on institutional adoption and of course read and commented elsewhere (https://bitcointalk.org/index.php?topic=5216383.msg55637826#msg55637826) this report.

The analysis is well done, and conveys the right message that institutions are getting involved in bitcoin. Of course we still are scratching the tip of the iceberg, because the rise of Bitcoin as a true store of value would have unimaginable consequences. Just thing at the stock to flow model in BTCGOLD: that would imply bitcoin appreciating versus gold because it is recognised as the best SoV. That would be massive.

Anyway, back to topic, what is always puzzles me in this kind of analysis is that seldom they focus on the USD value of transaction. So a rise in the value of transaction is only the side effect in the rise of the price: if I put 1BTC on one exchange and after six month I retrieve that same BTC when the price has doubled, is it fair to count that as a “exchange volumes have doubled!”? I am not sure about that. I have the same dilemma while looking at Grayscale AUM.

Talking on hedge funds, more brokers will add the btc pair in their platform as time is coming. Bitcoin growth lately is more of large investment flowing in the market by institional investors, banks and the big buyers. Bitcoin price is close to ATH, we might have an outburst of surprise within the last month.

I tthink the increase in price of bitcoin is as a result of bitcoin having more than enough investors committing their resources towards buying bitcoin and also making the market scarce and also reducing the circulating suplly cos to the rest of my knowledge, when bitcoin is bought by investors, it goes to a wallet for safe keeping.

Bitcoin is growing because investors have realized that they can back their assets better than gold.
Bitcoin has reached its maturity as the analysis points out. More news tells us that Bitcoin is the scarcest asset in the world. That worries me a bit because there will be someone who can hold it for a long time and keep it in their reserves.
 https://twitter.com/100trillionUSD/status/1330104450783064065?s=19 (https://twitter.com/100trillionUSD/status/1330104450783064065?s=19)

As we are seeing price in positive motion, expect that a lot of stakeholders will be joining this community. And the good news is, top companies are realizing that crypto is a good alternative form of payment method just like PayPal. With millions of users on board, definitely, that news is a good boost to crypto community. Even if veteran crypto users don't like to use the platform, still it is good for crypto adoption.

I believe it's not just the institutional money but the collective efforts of everybody who wanted to see BTC here. You, me and anyone who just believed and kept hodling is now sealing the deal with both hands in greens. I also believe that this will not remain the same for long term as those institutions also know how and where to take their profits? This will definitely bring in some correction (not a major one but possibly slow and an unnoticeable one) which is inevitable.

We don't actually know if institutional investors view Bitcoin as a long-term store of value or a speculative asset. They have all seen the historical charts, so they know that Bitcoin can have bubbles, and I don't think that they are like retail investors, who hodl Bitcoin no matter the price - professional investors will take profits if it looks like there's another bubble forming.

And what are these big companies that adopted Bitcoin as a means of payments? So far in the recent times we only have PayPal allowing people to invest in Bitcoin, and that's it.

Institutional money is flowing, and we can see the effect on the price of the BTC, many wonders will still surface in the next few weeks as I am seeing BTC not to put a rest at the 20k resistance.

With institutional players, there's a high chance that it can double the last time High.

Knowing how this people thinks about investment, they wll keep the opportunities to favor them and let things to flow as smooth as possible
to attract more new investors. Their involvement now will be the changing factors to how bitcoin will go further. It's really good to see that holding now will be more profitable in the next following years.

Not sure about the double time high but definitely after seeing some x-factor I believe it will break 20k barrier, Also I would wait for few more days to sell and yes this is not the right time to buy BTC as the price is already in peak. BTC deserves this place after everyone's effort it has steadily reached here and hopefully it will go in future as well.

Yes institutional money is flowing into Bitcoin which is pushing it's price further before the speculated time and it's for sure that Bitcoin will cross previous ATH and set a new record but I would personally suggest users to refrain from making huge investments when the price is at peak as it might drop anytime once institutions and huge investors decides to cashout and I am happy to see market has learnt from the past and I see some sensible articles posted about do's and don'ts during bull run.

The way we are going with this I hope that these institutions don’t buy up everything and just keep the market liquid. I have read somewhere that too much of HODL’ing Bitcoin wouldn’t be good, there should be more than enough being used for transactions so that it can keep circulating than just being stored away in a wallet where they will stay idle.

Last time I checked, all these institutions and whales are buying up huge amounts and storing them away in their savings wallet. The next thing they will start playing pump and dump which is one of the most annoying thing.

From a mere speculative point of view, this type of news or research can be used to make a good Pro-Bitcoin campaign, which, is not a bad thing, this drives the price of BIitcoin, it also helps those people to believe even more In Bitcoin, it is also a very good strategy for Strong Hands to start selling little by little and that is why they take advantage of people's emotions to make them buy. You have to be very careful when analyzing the market only based on articles and news, I think that the market when money enters can come from anywhere, from institutions, from investors, what you have to pay attention to is that currently this boom is supported by many newscasts, and this fact keeps the price rising.

Big financial institutions are adopting bitcoin and bringing it closers to their customers. I know some persons who thought bitcloin was just another ponzi scheme until Paypal integrated it, today, I get many calls form people asking if this was the best time to buying bitcoin which they had once tagged scam. I don't know what will be of commercial banks few years from now.

Traditional players are starting to become aware to the potential of the bitcoin and they are withdrawing their money and re investing it in cryptocurrency market especially in bitcoin because of the potential rewards that they can get. Look at the volume of the bitcoin wherein, it keeps rising because of the traditional investors which are the institutions and organizations. I recently read a link wherein there are holding companies right now that keep acquiring bitcoin, for sure that those bitcoins are in cold wallet wherein you will not see it in exchanges that can cause the increase of the price of the bitcoin. I'm looking forward to see a lot more institutions that will start acquiring bitcoin and for sure that it may cause a catalyst where it can result to the breakout of the ATH.

The problem is that they are using a conceptually wrong unit of measurement of value. Bitcoin is a scarce digital commodity, supply of which cannot be increased at will,  whereas USD supply is literally infinite since cost of its production is zero. Consequently, in terms of dollars, the value of bitcoin and the value of each transaction made in bitcoin may theoretically be infinite number. Does it then make any sense to calculate Bitcoin's value through the lenses of any infinite asset? I don't think so. The value of bitcoin, or to put it differently, the price of bitcoin can be calculated exclusively through relatively scarce commodities such as gold and others. So, the rise in the value of bitcoin transactions means the number of commodities (the production cost of which is more than zero) you can buy with it is now bigger.

In recent years, many organizations have tried to issue their own virtual money. 

Russian developer Pavel Durov made an attempt to implement the TON (Gram) project. 
Mark Zuckerberg tried to implement the Libra project. 
Similar projects were announced by banks, investment funds, large corporations. 
Central banks also create virtual money (CBDC)

I'm not even talking about derivatives, bonds, bills of exchange, etc. 

Therefore, the question arises - who has the right to create money?  One answer to this question might be that whoever owns bitcoin can create money.  With this option, bitcoin becomes a reserve currency (reserve asset).  A very important function.  Moreover, the cost of such a reserve asset must be very high. 

This is one of the explanations for Bitcoin's rise in late 2021.

It's still too early to give a verdict about LN, which is mainly meant to offload bitcoin mainnet transactions by the way, the implementations are written in Golang and not only there aren't as many Go developers as for other languages, there are even less who are actively contributing code to them.

It's mainly because developing anything serious is hard and there are usually only 5 or 10 contributors keeping the whole thing together.

The "development" and "beta" labels scared a way a good number of potential users. Basically LN is in perpetual development until we can figure out a final specification for it, then after that, the community can try to encourage people to run more LN nodes.

If the community can run more LN nodes than full nodes, then large fees by exchanges operating on the mainnet can no longer affect user adoption of bitcoin on LN.

Exchanges and institutions have strength in numbers regarding the amount of bitcoin they own. But I hope we can contain whatever negative effects they have on fees within the mainnet, and that community members are the ones who control the most LN payment channels.


I see no benefit in denominating exchange volumes in USD unless you are trying to advertise how much volume your exchange handles, which USD rates conveniently inflate on its own. I mean, even if the inflated volume is to the tune of tens of billions of BTC, you can't convince people your exchange process more money than Wall Street. ::)

It is more fair to denominate the trading volume in BTC, or else every halving will give all the exchanges an illegitimate excuse to claim their volumes are higher, without doing anything... suddenly if your exchange only processes millions of dollars in BTC, it's a warning that it's not liquid, when 6 years ago the same amount of USD would indicate a prosperous exchange.

I tend to agree with you, in principle.
 On the other hand we have to admit the world's financial numeraire is still the US Dollar. This means an inflow of 100 BTC when the BTC is at 1,000 USD is very different from a 100BTC inflows when the BTC is at 100,000 USD.
For this reasons on my thread about Grayscale I tend to monitor both metrics.

I was going to say something very similar. 

The comment reminds me of 2011 or 2012 when people were saying "The bitcoin project ended in failure" and similar statements.  Lightning is still very much a work in progress and between LN, taproot and other improvements that are coming, in a few years (or less) more of the complaints in the OP's post will be addressed.  Anonymity is critical etc.

Just one more point though regarding lightning: Lightning Labs' lnd is written in Go, Blockstream's c-lightning is in C, and another implementation is in Scala, so there are options besides using Go.

This year Bitcoin is proving to the world as the best asset with the price that continues to rise, therefore demand for Bitcoin continues to increase.
In my opinion, it is not only institutions that are starting to invest in Bitcoin, but many billionaires are interested in investing in Bitcoin as well.
Actually we have to thank Paypal which increases trust in Bitcoin, because since Paypal announced that it has accepted cryptocurrency. Many people
are becoming aware and interested in investing in Bitcoin, no doubt Paypal's popularity and reputation does have a big effect on the price of Bitcoin.

Bitcoin is growing not just because of institutions but as well as the cumulative effort of all the people investing and making use of Bitcoin. All together those efforts have brought Bitcoin into where it is right now. Although institutional investors have a big impact on the growth of Bitcoin, still that is just a part of the overall process and success of Bitcoin because there are still lots of independent investors that are taking a big part on this growth all along. As Bitcoin grows in time, people and big institutions are showing big interests on investing into it that is why this year 2020 we have seen another massive growth that is happening with Bitcoin. If you will sum it up, we are all grear contributors with the growth of Bitcoin ever since no matter how big or small as long as there is usage, investment and adaptation, Bitcoin will continue to grow with the help of all.

Institutional buying is something new in the Bitcoin ecosystem. The more you look, the more sign of this you find. Bitcoin treasuries, Bitcoin exchange traded products, CME having the biggest OI are all sign of the new phase in bitcoin history: financial adoption.

Yeah, this is the main reason why BTC is on the rise and I hope that institutions will continue to do so. But this will give birth to capitalization.

This does mean that more the institutional investors we have the more will be price over the period of time. I mean they will have the bitcoins directly into their wallets and they will only come out when they need to make payments and that too in the form of "bitcoin"only. What i mean is, bitcoin to bitcoin transaction thus without loosing any value but promoting the use of bitcoin. This will always keep the resistance of bitcoin at high peak. The more people will understand that holding and using bitcoin for the purpose of b2b transactions (not for fiat) will gain more value within bitcoin atmosphere. Not sure if anyone understand what I am trying to portray here but this formula would really benefit the whole community in the long run.

Institutions are shaping the Bitcoin ecosystem trying to rebuild the Usual corrupted fiat-system, with all his flaws, greed and misalignment of interests.
This time is different, as the user always has the final option to get hold of their funds. I guess this is a tiny, but really important difference that will act as a trigger in case institutions starts doing something wrong as they did back in 2008.

During the previous bull market of 2017, there happened some massive adoption of bitcoin. In specific the massive adoption and acceptance of bitcoin from Japan made a big change in the progress of cryptomarket. This time more large companies are making their official involvement into bitcoin usage. This time more governments have started to regulate the usage of bitcoin which could bring in more users to the cryptocurrency.

Yes, the role of the institutions is undeniable in the process of the price increase. They did not just make an investment in Bitcoin, they made a great precedent about investing in Bitcoin. Also, the investment decision played an important role in the wide adoption of individuals. They saw that institutions invest in Bitcoin why should not I? So institutions invested also promoted the Bitcoin.

I have seen a lot of people make this claim here in Bitcointalk and it's not accurate.

Ricardo Salinas Pliego didn't put 10% of his wealth in Bitcoin. He is worth around $13 billion and that would have meant an investment of $1.3 billion (at that time it would have accounted for 100,000 BTC).

What he said is that around 10% of his liquid assets are in Bitcoin. And there is a huge difference between total assets and liquid assets. For most of the billionaires, liquid assets represents 1% or less than that of their portfolio. Unfortunately fake news factories such as Coin Telegraph twisted the news and presented it as Mr.Pliego having 10% of his total wealth in the form of BTC.

I tend to agree on the above, total wealth is very different from financial wealth, that is again different from liquidity. Of course the 10% of the above measures can vary greatly, as, as you said, I don’t expect any millionaire leaving their wealth on the deposit account.
Actually the world richest man, Elon Musk, once said he consider himself cash-stripped.