Grayscale’s latest report suggested that the current conditions in Bitcoin are similar to the period in early 2016. This period is just before the historic price rally in which Bitcoin reached $ 20,000.
Grayscale, one of the largest cryptocurrency investment companies, says the current Bitcoin market structure parallels early 2016, before the Bitcoin historic bull run. Grayscale’s argument means that the bitcoin price can rise sharply.
“Investors are seeking ways to hedge an ever-expanding monetary supply amid unprecedented monetary and financial incentives,” said Phil Bonello, Grayscale Research Director, in a report entitled “Understanding the Value of Bitcoin.” We believe that Bitcoin can be used as a store of value and a way to avoid this massive monetary inflation, due to its unique qualities, such as its verifiable scarcity and supply that cannot be controlled by a central authority. ” says.
In recent months, some key investors have turned to Bitcoin against inflation, seeing it coming as a result of the unprecedented stimulus packages that the US government and the Fed launched to support the economy. Famous billionaire Paul Tudor Jones was one of them. More recently, with a market value of $ 1.4 billion, the American giant MicroStrategy announced that it has purchased $ 250 million worth of Bitcoin.
Meanwhile, Bitcoin price also climbed to its highest level since June last year. This has created a new wave of confidence among Bitcoin investors that the all-time high could come back.
The Grayscale report also pointed to the decline in the Bitcoin presence on exchanges. This was interpreted as investors expecting the Bitcoin price to rise, and they were turning to long-term investments rather than short-term speculation. In addition, the company emphasizes that the number of active addresses per day is at the highest point since 2017, when the record level of 20 thousand dollars was reached.