After a long wait, the Bitcoin price has finally returned to the same price range as it was 3 years ago. Back in 2017, when the price of Bitcoin (BTC) peaked at around $ 19,900, most digital currencies also saw weekly gains of 200% or more.
Fast forward to today, and the $ 19,100 BTC price is almost identical to the price of December 17, 2017. You may think that little has changed, although some altcoins have been violated, but that can not be further from the truth.
Much has changed in the cryptocurrency sector, and most of the necessary infrastructure has been built since 2017.
Today, highly regulated derivatives are offered through the launch of CME and CBOE futures, and the rapid growth of institutional investors provides an endless source of demand for bitcoin.
A new series of Decentralized Finance (DeFi) platforms has also emerged with a market value of billions of dollars. They support a new lending system, synthetic swaps and interest rate systems for a whole new group of investors.
Compared to 2017, there is a wealth of easily accessible data on price assessments and market value. This will help investors to better understand how the market today differs from the 2017 market.
We can better understand what the cryptocurrency market can look like in a couple of years by analyzing the differences.
What has changed since 2017?
When it comes to ranking cryptocurrencies by market value, four of the top five have been the same. Ironically, the market covers for Ether (ETH) and XRP are relatively the same at $ 69 billion and $ 28 billion, respectively. The move took place even though the prices of both cryptocurrencies have fallen 15% since December 2017.
This effect is caused by the issuance of new coins. For example, the supply of Ether has grown from 96.4 million to 113.7 million. The corresponding inflation for three years was 17.9%. In comparison, the total number of bitcoins in circulation increased by 10.8% during the same period.
Apart from Bitcoin, Ether and XRP, the rest of the top 20 cryptocurrencies have been hit hard. IOTA lost 91%, Bitcoin Cash (BCH) 84%, Litecoin (LTC) 73%, and Cardano (ADA) 70%.
It should be noted that among the current top 15, the only new players are Chainlink (LINK), Polkadot (DOT) and Binance Coin (BNB). It should also be noted that Polkadot did not exist in 2017 or 2018.
On the other hand, Ether rivals such as Cardano, EOS, NEO, Ethereum Classic (ETC) and QTUM seem to be losing ground. It was replaced last year by interop codes such as Chainlink and Polkadot.
The three main currencies currently attract BTC, ETH and XRP with a market value of $ 448 billion, an increase of 7% over three years. Meanwhile, the remaining 21 leaders are currently increasing capital to $ 77 billion, down 41%.
It can automatically be assumed that Bitcoin’s dominance has increased dramatically at the moment, but it has only grown by 2% to today’s 63%. This effect is only possible when you add hundreds of new icons. The three different sectors are exchange tokens, stack coins and finally the decentralized financial sector (DeFi).
Institutional investors will influence prices in the future
As mentioned earlier, as of December 2017, there were no CBO or CME futures, let alone the corresponding liquidity. The same can be said for praise from institutional investors and effective investment in Bitcoin.
Recently, BlackRock CEO Larry Fink seemed somewhat optimistic about Bitcoin’s emergence as an asset class in itself.
Bitcoin and Ether derivatives provide a huge competitive advantage for professional investors’ money. Recent positive comments from US CFTC observer Heath Tarbert have brought ETH-regulated futures one step closer.
Therefore, the chances of reversing BTC and Ether decrease over time. Apart from dominating the derivatives markets, the BTC and Ether 97% gray tone funds provide some insight into the theory.
Key factors that will affect the upcoming bullish trend
Trying to predict massive market changes in the future is a tedious and usually ineffective strategy. However, some conclusions can be drawn from this comparison.
According to the Linde effect, the lifespan of some technologies is proportional to the lifespan, and the longer they stay, the more predictable they can be.
If we use this model in the sector, we can conclude that the longer a cryptocurrency remains in the top 12, the more likely it is to remain relevant in three years.
For example, the story of the “killer” Bitcoin and Ethereum was incredibly popular in 2017 and 2018, when blockchain competitors were expected to catch up with leaders in this sector.