Bitcoin (BTC) reached $ 20,000 for the first time on December 16. This milestone comes a little over two weeks after you have crossed the nominal altitude.

Meanwhile, this rally differs from the 2017 rally for several reasons that could help the BTC rally. This includes growing institutional demand, growing investor sentiment that BTC is a store of value, and a stronger network base.

Institutional Demand Is Fueling Bitcoin Rally
In December 2017, data showed that private and private investors were behind the Bitcoin rally. At the time, CME BTC futures were launched and institutional investment vehicles were in short supply.

Thus, the rally was mainly driven by retail investors who suddenly stalled after strong selling from whales.

This time around, platforms targeting institutional investors have seen a significant increase in trading activity. For example, the CME BTC futures market recently generated open interest of $ 1.27 billion, becoming the second largest market in the global bitcoin market just after OKEx.

Institutional investors are unlikely to invest in bitcoin with a short-term strategy. It is increasingly seen by many as a valuable and alternative digital gold repository.

As Cointelegraph previously reported, the increase in the Bitcoin Trust’s grayscale premium indicates that institutions are increasingly looking for opportunities to use BTC and are paying above the spot market price to gain the privilege.

BTC is increasingly seen as a valuable store
Institutions and investors with high net worth are beginning to recognize Bitcoin as a store of value and capital.

MicroStrategy, a US-registered company that bought $ 450 million in bitcoin earlier this year, has launched a campaign to encourage other institutions to allocate bitcoin capital.

The perception of BTC as a hedge against inflation and sustainable value creation could make BTC compelling for the broader financial sector in the medium to long term. Michael Saylor, CEO of MicroStrategy, said:

“Bitcoin is the best reserve capital in the world and an emerging dominant money network. It is the solution to the problem of value faced by every person, company and government on earth. With the advent of this news, the world will change for the better. ”
Meanwhile, Bitcoin’s performance has fallen behind gold again this year, as have the S & P500 indices, despite the precious and recent metal hitting all-time highs this year.

As such, it should come as no surprise that Wall Street is now taking Bitcoin more seriously than it was in 2017. More evidence of this was found on December 3 when the S&P 500 announced plans to roll out its digital currency indices next year.

Bitcoin fundamentals are stronger than ever
As Cointelegraph mentioned, Bitcoin is fundamentally stronger than ever and the network is now moving $ 500,000 per second around the world. In other words, Bitcoin transfers $ 4.627 billion daily.

The network is also ten times safer than it was at the end of 2017, as hash rates and mining problems continue to reach new heights this year. Hash rate refers to the amount of processing power spent verifying Bitcoin transactions and keeping the network secure.

Source: CoinTelegraph