Bitcoin prices have been rising to new levels recently, and the basic dynamics of tighter supply and rising demand have underpinned this rise, according to a report compiled by London-based crypto custodian Copper.co.
Copper claimed that the recent rise in price is a function of the steady increase in demand for BTCUSD bitcoins,
and the growing shortage of assets that has a maximum supply of 21 million, which is expected to be affected by 2140. The researcher also said that interest in new bitcoins comes from North America and in particular , from the United States.
Approximately 18,625 million bitcoins have been created or digitally mined in the manner of cryptocurrency enthusiasts, according to CoinMarketCap.com, but a good portion of those have been lost, the Copper folks wrote.
According to their estimates, 56% of bitcoins are owned by investors, 18% are lost, 15% are owned by so-called traders and the rest has yet to be exploited (see attached chart):
through Copper.co
Copper said that since most investors own long-term holdings, accounting for eight out of ten cryptocurrency holders, the increase in appetite for the world’s most popular digital assets may have an excessive effect on stocks.
Researchers said the rise of Bitcoin above $ 40,000 was already at stake even before Tesla Inc. TSLA,
made his surprise presentation to regulators on Monday, declaring his $ 1.5 billion investment in bitcoin, and his decision to finally allow customers to buy their products with bitcoin.
“The data show that new investors raised prices much more in China
the last six months of 2020, to acquire them north of 2 [million] bitcoins, ”Copper researchers wrote in the study.
“To be able to buy bitcoins in such deep quantities, the price went up
well above the $ 20,000 that helped persuade early investors
sell its cryptocurrency above its previous all-time high, ”they said.
According to the report, the crypto market depends on a supply of about 3.2 million bitcoins in stock exchanges and held by traders.
The study also found that investors who have owned at least 1,000 bitcoins for about three months increased their holdings by 2020 by 173%.
That growing demand, combined with this limited supply, helped raise bitcoin values to a total market value of about $ 800 billion, and Copper said the main driver of demand has been northern buyers. Americans taking supply of Asian miners.
“The increase in prices is the result of a marriage of demand and liquidity
happened in early 2020 when the outflows of exchanges, ie
bitcoins moving into self-custody were increasing significantly, ”the company’s research found.
Copper also made an interesting finding and noted that nearly a third of the volume of bitcoin trading occurs during the period when the New York Stock Exchange is open and investors should focus on trading on the Dow DJIA. Jones Industrial Average,
and the S&P 500 SPX index,
That a large portion of bitcoin trading takes place on stock exchange hours, between 9:30 a.m. and 4 p.m. in the east, may explain why S&P 500 movements are sometimes correlated with bitcoin prices, he said. write Copper.