Bitcoin went through the greatest bear market of all time last year but recent trends show that this hiatus has been good for the crypto. The past year gave way to bitcoin to improve its infrastructure and lead to the recent stable bullish trend.
Barry Silbert, founder and chief executive officer for the Digital Currency Group, is of the view that this ‘price rally’ of bitcoin is different than the previous ones. He explained that bitcoin has grown its infrastructure progressively and has stood the test of both time and the greatest bear market ever. Furthermore, the investors are now more willing to invest in bitcoin rather than sticking to gold, which is the best thing to happen to bitcoin.
Backing this up, Anthony Pompliano, co-founder and partner at Morgan Creek Digital, produced extraordinary humour out of the situation. He hit back on to the critics who thought bitcoin will not make it out of the bear market at all.
RIP to those who said Bitcoin was going to $0 in the bear market.
People Like to Stick with Improved Bitcoin Infrastructure
Silbert mainly talked about underlying factors that have made this bitcoin bull run distinct. First off, he pointed out that the most recent bubble is different from the one in 2017 as bitcoin has now evolved so much regarding its infrastructure. Maximized inclusion of the custodians have immensely influenced this bull run. Custodians are the entities that hold user securities preventing any access from third parties.
In case of cryptos and obviously, bitcoin, these are trading platforms that store securities in digital form. Custodial wallets are trustworthy and separate funds managers from the physical securities, thus creating a protective layer in the system. As Silbert states, this is one of the reasons why bitcoin has become stronger.
Nevertheless, there are several examples of custodial bitcoin wallets like Blockchain.Info and Wallie, from the Dutch bank, ABN AMRO. The later has been pulled off before it could be completed as the bank decided that the crypto market is unregulated and that they do not want to jump aboard such a market. This has been the case with several projects as major institutions keep pulling back just because the crypto market is too much of a risk for them.
Gold No Longer the Prime Valued Asset
The generation that took gold as a major valued asset has now shifted the charge on to the next generation and fortunately for bitcoin, the new generation doesn’t place gold at the top of the list. The boomers were the ones who took shelter under the grand set value of gold but that chain has broken eventually.
The current generation of investors do not hesitate in investing in cryptos and bitcoin is their top priority. Mass adoption would now be easier to trigger too, which has always been considered to be the best deal for the entire crypto market. This is the second reason, as per Silbert, that will carry bitcoin on and on through the ‘rally’.
These days banks are the major entities that buy gold, not the regular investors, indicating the fact that investors are less interested in gold now. Grayscale recently came out with an ad campaign that pondered over dropping gold as the prime asset. The marketing campaign was named ‘Drop Gold‘ and has drawn the attention of many.
People are starting to realize that government reforms might not be enough to push bitcoin. It needs to stabilize itself through rigorous testing, to a level where such reforms would mean great changes. Silbert believes that the testing has completed and investors might start working on further projects to score government regulations.
The Van-Eck ETF proposal was supposed to get approved soon. Hester Peirce, SEC commissioner, aka the ‘Crypto Mom‘, is of the view that the ETF might just get approved by August this year. Nevertheless, SEC had previously set the date of the verdict to be May 21.
Institutional Investments Keeping Bitcoin Stronger
Institutions have started investing in the bitcoin market. The Grayscale Investment formed a major part of Silbert’s talk with Bloomberg. Statistics show that the Asset Under Management investment has reached to about 1.1 billion USD which is obviously gigantic. This is a great for cryptos as 70% of the investment was institutional, out of which 90% has been for bitcoin.
Silbert stated that there is a solid chance that we are going to see this bitcoin bull run for a much longer time owing to the aforementioned three major reasons. The bitcoin market is stronger now than ever, as per Silbert, and can stand the hits more efficiently and effectively than before. This is a great milestone for bitcoin as a digital asset.