Bitcoin in the starting blocks: why this crypto bull run is completely different

Is there any doubt that we are in the early stages of a crypto bull run ? Pick a metric, any metric, and the odds are good it will suggest it.

For example, the total value of the capital locked in DeFi has never been higher.

Likewise, the total crypto market cap is hovering in and around its all-time high of $ 1.1 trillion

Despite numerous crypto newbies popping up on social media, the reality is: retail investors are not here yet. At least not as much as three years ago, during the last bull run.

A look at Google Trends confirms this. The search queries for the keyword “cryptocurrencies” are expected to reach 56 by the end of January 2021. Although this is a bullish sign, it is still far from the values ​​in January 2018.

Keyword “Crypto” on Google Trends, source: trends.google.com

Back then, the ICO craze and the Bitcoin Rush app of private investors, who were often out for a quick buck, drove the market up.

But this time around, it’s institutional investors who are the driving force behind this bull run.

Earlier this year, PwC’s Global Crypto Leader Henri Arslanian said:

“If you look at this bitcoin rally that we’ve seen over the past few weeks and months, there are really two big elements that are driving it. One is the continuous entry of institutional players. But there are also a lot of regulated players. That wasn’t the case a few years ago. “

Why the institutional interest?

The outbreak of the pandemic turned everything we believed we knew on its head.

Broken supply lines, mass unemployment and fiscal incentives highlighted the fragility of the global economic order.

As difficult and stressful as it is to go through this, the only silver lining is a flight into anti-inflationary assets, particularly Bitcoin. It has benefited from the increasing demand for it as more and more people buy Bitcoin.

The realization that you are sitting on dry land with cash has called the institutional investors on the scene.

MicroStrategy got the ball rolling as the first publicly traded company to hold Bitcoin as part of its treasury strategy. Once one institution “joined the party”, others followed suit.

This is expected to gain momentum through 2021.

Aside from the price spike aspect, it’s unclear how that will affect the cryptocurrency industry.

However, the fact that big names like Square, PayPal, and even JP Morgan are on board adds a touch of legitimacy to it all. And that’s one thing that was missing during the last bull run.

Turn in the world of soccer: David Barral is the first footballer to be paid in Bitcoin. This was announced by his new team, DUX Internacional de Madrid.

David Barral nuevo jugador de DUX Internacional de Madrid ¡Bienvenido al club infinito!

Se convierte en el primer fichaje de la historia en criptomonedas. Gracias a @CRIPTAN_es nuestro nuevo sponsor por hacerlo posible.

David Barral is the first footballer to be paid in Bitcoin Revolution but he is not the only sportsman to have chosen them as a method of payment. Only a few weeks ago the similar turning point had arrived in the US NFL, with Russell Okung. Enabling the Bitcoin payment method in this case is Strike.

– DUX Internacional de Madrid (@interdemadrid) January 15, 2021

As you can read in the tweet the mode of payment will be in cryptocurrency thanks to the partnership with Criptan.

Criptan is a Spanish platform that allows the purchase of cryptocurrency via bank account or credit card. It also has its own Visa circuit credit card that allows users to spend cryptocurrencies both in physical stores and online.

David Barral in a tweet commented:

„I am happy to join DUX Internacional del Madrid, with the ambition and responsibility to continue to compete and achieve important challenges in my sports career.“

While Criptan congratulated the player and the team, welcoming them to the world of cryptocurrency.
Who is David Barral, the first footballer paid in Bitcoin

David Barral is a Spanish striker, born in 1983. He will now play for Inter Madrid, in the Spanish third division, but boasts a past with the most important teams in Spain, including Levante and Granada.

After the recent experience in Japan in the ranks of Tokushima, he returned to Spain first in Racing Santander and now in Inter Madrid.

Sport marries Bitcoin

Unlike David Barral, Russell Okung was already asking to be paid in Bitcoin since 2019. While to tell the truth, looking at Barral’s Twitter profile does not emerge anything that would suggest his involvement in Bitcoin.

The fact remains that even soccer seems to be increasingly involved in the world of cryptocurrencies. Only yesterday AC Milan announced its partnership with Chiliz and the issuance of its fan token. Before Milan, the other Italian team Juventus had launched the JUV token for more fan involvement.

Then there is to mention the experience of fantasy soccer si blockchain enabled by Sorare. Numerous are the teams that have joined, whose players have become collectible and exchangeable NFTs. A few examples, among the most recent:

  • River Plate;
  • Real Madrid;
  • Inter Milan;
  • Bayern Munich;
  • Zenit Saint Petersburg;
  • Paris Saint Germain.

Among other things, one of Sorare’s advisors is Barcelona footballer Gerard Piqué.

Ultimately, it seems that cryptocurrencies and blockchain are destined to make an increasing contribution to the world of sports.

Bitcoin price reaches $40,400, what is going on in the market?

The bitcoin (BTC) price shot up to over $40,000 earlier tonight. That’s double the old record of 17 December 2017 and also double the December 2020 price, exactly three years later.

In less than 22 days, the value of bitcoin has doubled. Three weeks ago the price really went through the ’20k‘ for the first time, now the price is around $40,000.

Just after the price set this new record, it did fall sharply. In the meantime part of this decline has already been bought back, as can be seen in the (daily) chart below.

Bitcoin price

As a result of the rebound, the price changed today by $5,000 in one day. How should you look at this rise?

Is it too late to buy, or should you sell? Of course it all remains glass-to-bulb looking and speculation, but there are some things to be said about this situation.

Sui Chung is the CEO of CF Benchmarks, a company that supplies indices for the CME says the following to Cointelegraph:

„No one can deny that we are seeing a new asset class in the making. This is the moment when every company and individual is seriously considering how to deal with cryptocurrency“.

Bitcoin is a monetary revolutionary system. If you’re hesitating to buy over sell, keep in mind that the crypto currency was conceived for the ultra-long term. Market cycles last for years and digital scarcity is still in its infancy.

Big profits in the short term are certainly possible, but Bitcoin was conceived as a means to save (to hodge) and not to trade.

On-chain analyst Willy Woo adds another analysis. The recurring story is that institutional parties are buying. But according to them, it’s the smaller parties like family offices that are buying.

Sentiment changes fast

Barry Silbert of Grayscale clearly shows how hard the sentiment turns. Where the community had been looking forward to the old record of $20,000 for three years, this price now feels like the time to ‚buy the dip‘.

As far as the price is concerned, Bitcoin is now in ’never before entered territory‘. This is also called price discovery. Mati Greenspan of Quantum Economics writes the following about this:

„Graphs only tell us the past. We are now in a brand-new territory. This bull run started at $10,000 and typically a 10x increase from the previous all-time high seems to be the norm for a bitcoin bull cycle.

So we are only halfway there with extremely good momentum, high volumes and exceptionally strong fundamentals“.

Fundamental value

What does Greenspan mean when he talks about fundamental value? The answer once again lies with digital scarcity.

Where the maximum amount of bitcoin in the protocol is 21 million, and the inflation number halved in May 2020, the opposite is happening in the world around us.

Credits are being issued at a pace never before seen. For example, the balance sheet of the U.S. Central Bank increased by more than 22% this year.

The smart money is looking for opportunities to keep their assets for the long term; a hedge. The digital gold seems to be a hot item for this.

Large investors, insurers and asset managers such as Guggenheim, MassMutual and Stone Ridge stepped in with millions at a time. However, these same fundamentals are now permeating retail investors: bitcoin is not for criminals, it is a modern way of saving.

Attention blown

On the other hand, it looks a lot like a bubble. David Lifchitz, CIO of asset manager ExoAlpha, therefore gives a warning: „Bitcoin rises too fast and evokes memories of the dotcom tree“. But on the other hand: the Internet is now an integral part of society.

Finally, a warning: the market is currently very volatile. Earlier this week, the price plummeted by 20%, a drop that was reversed within a few hours. As now around $40,000, the price dropped immediately by almost $4,000.

After calling Bitcoin „rat poison“, Warren Buffet’s bank can be overtaken by cryptomeda

With its most recent high, Bitcoin achieved market capitalization of US$ 522 billion. This places digital currency as the 11th most valuable asset by market capitalization, surpassing Visa and even the famous JPMorgan Chase bank.

With Bitcoin still appreciating and seeking new levels Financial Peak of support without any apparent resistance, the price of the currency has been attracting investors‘ attention. Moreover, digital currency is giving a „taste of revenge“ to many supporters of cryptomime, especially „against“ those who doubted the digital asset. One of the Bitcoin detractors who now has to swallow his skepticism is legendary investor Warren Buffet.

Buffet is one of the world’s most respected investors, with a legion of followers and successful apprentices. But he has always been against Bitcoin and other cryptomites. In 2018, shortly after the tragic drop of 80% after a record price, Buffet said Bitcoin was Mouse Poison.

In 2018 Buffet said in an interview with CNBC:

„It’s probably rat poison (…) In terms of cryptomorphs in general, I can say with almost 100% certainty that they will have a bad ending. If I could buy 5 years of investments in all the cryptomoks I would, but they wouldn’t be worth a penny“.

But then, what has changed since 2018? Well, the answers are quite simple: Bitcoin has recovered from one of its biggest falls, surpassed records in 2017 and continues to appreciate. Now, the currency may exceed the market capitalisation of Berkshire Hathaway, the bank led by Warren Buffet.

Bitcoin about to be worth more than Warren Buffet’s bank
With its most recent high, Bitcoin achieved market capitalization of US$ 522 billion. This places Bitcoin as the 11th most valuable asset by market capitalization, surpassing Visa and even the famous JPMorgan Chase bank.

Just above Bitcoin and in 10th place is Berkshire Hathaway, the bank headed by Warren Buffet, with a $538 billion capitalisation. If Bitcoin reaches the $30,000 mark, it will have more than $550 billion in capitalization and will have surpassed the value of one of the most traditional companies in the financial market.

Consequently, this would also make Warren Buffet’s bank worth less than „rat poison,“ as he himself put it in the past.

Although we are experiencing a new record every day, Bitcoin shows no signs that it will fall. As shown by the most famous Stock-To-Flow (S2F) model, which put the current price above the expected price.

„Bitcoin price at $25.3k above the $24.9k value of the S2F model“.

It is worth mentioning that, according to PlanB, creator of the S2F model, Bitcoin will reach $100,000 by the end of 2021.