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This is How Bitcoin Rally in H1 Was Different From 2017

This is How Bitcoin Rally in H1 Was Different From 2017 101
Source: iStock/Tramino

Four differences between the bitcoin rally in the first half of this year and the rally in 2017 show that this time it was institutional money that most likely helped the price jump way above USD 13,000 in June, according to a report by CoinShares, a UK-based provider of digital asset investment products.

The H1 2019 Crypto Report mentioned four factors that were present during the 2017 rally that were absent today:

  1. Widespread media attention
  2. Spikes in the use of “bitcoin” as a search phrase on Google
  3. Spikes in bitcoin-related tweets
  4. A corresponding rally in altcoins

Truth to be told, there were spikes on Google and Twitter, and the mainstream media followed the rally, however it was nothing similar to 2017.

Let’s take a look at the Google trends chart:

This is How Bitcoin Rally in H1 Was Different From 2017 102
Source: bitinfocharts.com

In either case, the report, authored by CoinShares’ research head Christopher Bendiksen and analyst Samuel Gibbons, went on to argue that since these factors this time were absent, the rally in the first half of the year was more likely driven by institutional money flows rather than retail investors, as was the case in 2017.

“This suggests that retail interest in Bitcoin is relatively tepid compared to 2017, and implies that the H1 rally was largely driven by the long-awaited entrance of institutional money,” the report said.

The report authors went on to name notable institutions that either have already entered the space, or have announced their intention to do so in the future, including Fidelity and Bakkt.

Lastly among institutions getting involved in crypto, CoinShares mentioned Facebook and its much-anticipated Libra stablecoin, which is expected to be integrated into wildly popular Facebook-owned apps like Messenger and WhatsApp.

The CoinShares research team also illustrated their thesis that bitcoin is maturing and becoming “institutionalized” by showing how volatility in the bitcoin market has been in an overall decreasing trend since 2011. As is widely known, lower volatility means lower risk, which in turn could make bitcoin more attractive as a mainstream store-of-value asset.

This is How Bitcoin Rally in H1 Was Different From 2017 103
Source: CoinShares

However, the second half of the year started in red and trading volume was down across many major exchanges in July.

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