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[Symmetrick]

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[bitmover]

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.

[pooya87]

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.

Previously, it was widely believed that trading is good for bitcoin, but comparing the current state of affairs, when most bitcoins are deposited in investors' wallets, we understand that this is not the case. It is the use of bitcoin as a means of payment, as a means of storing value, as a means of hedging that really positively affects the price of bitcoin and its mass adoption. Speculative use only has a negative impact.

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.

[Welsh]

Previously, it was widely believed that trading is good for bitcoin, but comparing the current state of affairs, when most bitcoins are deposited in investors' wallets, we understand that this is not the case. It is the use of bitcoin as a means of payment, as a means of storing value, as a means of hedging that really positively affects the price of bitcoin and its mass adoption. Speculative use only has a negative impact.

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.

[Tipstar]

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.

[Smartprofit]

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.

[Bttzed03]

Related article - Deutsche Bank Says Investors Increasingly Prefer Bitcoin Over Gold as Inflation Hedge

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.

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.

[KennyR]

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.

[nelson4lov]

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.

[globalcitizen]

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.

[clickerz]

Bitcoin is growing thanks to investment. Without investors, everything would be completely different.

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.

[Lorence.xD]

Bitcoin is growing thanks to investment. Without investors, everything would be completely different.

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.

[Anonylz]

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.

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
Mass adoption is inevitable from the influx of institutions and none institutions investing in btc.

[fillippone]

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 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.

[Gozie51]

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.

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.

[jerrison]

More recently, on Twitter, Chainalysis unveiled an analyst that says Bitcoin's current growth in 2020 is driven by heightened interest from institutional investors.

As you know, during the pandemic, many institutional companies began to revise their classic investment portfolios and allocate part of their money to buy bitcoin.

77% of mined bitcoins are currently on illiquid wallets, from which only 25% of bitcoins are sent, that is, 3.4 million bitcoins are available for buyers. Since the ATH reached Bitcoin, there have been 3 million more bitcoins on investor wallets. And on the highly liquid wallets of traders, on the contrary, there are fewer bitcoins.

The following graph shows the involvement of institutional investors in large transfers of bitcoin from exchanges. In 2020, the engagement rate increased by 19%, compared to 2017:

Let's parallelize the growth of Bitcoin in 2017. Back then, the catalyst for growth was retail investors buying cryptocurrency with personal savings.

Also, the influx of bitcoins in 2020 is observed more on North American exchanges or exchanges focused on this region. These sites are more preferred by institutions based in America and Europe. Compared to 2017, then Asian exchanges had priority.

So, let's summarize. The price of bitcoin is growing because institutionalists see bitcoin not as a speculative instrument, as it was before, but as a long-term investment, investing in bitcoin is now strategic. Against the background of institutional interest, Bitcoin is also being revealed as a means of payment. Many large companies add it to their platforms, which also has a beneficial effect on its price. Experts predict an influx of other institutional investors and further massive adoption of bitcoin.

sources:
- https://twitter.com/chainalysis
- https://forklog.com/chainalysis-bitkoin-vyros-vdvoe-posle-halvinga-blagodarya-institutsionalam/

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.

[verita1]

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

[24Kt]

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

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.

[Stedsm]

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.

[hatshepsut93]

So, let's summarize. The price of bitcoin is growing because institutionalists see bitcoin not as a speculative instrument, as it was before, but as a long-term investment, investing in bitcoin is now strategic. Against the background of institutional interest, Bitcoin is also being revealed as a means of payment. Many large companies add it to their platforms, which also has a beneficial effect on its price. Experts predict an influx of other institutional investors and further massive adoption of bitcoin.

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.