Bitcoin prices have climbed to new heights recently, and the core dynamics of tighter supply and increased demand have supported this growth, according to a report by London’s crypto custodian Copper.co.
Copper argued that the recent rise in prices is a function of the steady increase in demand for bitcoin BTCUSD,
and the growing asset deficit, which has a maximum supply of 21 million, which is expected to be affected by 2140. The researcher also said that interest in the new bitcoins comes from North America and, in particular, the USA.
Approximately 18.625 million bitcoins were created or mined digitally in the language of cryptocurrency enthusiasts, according to CoinMarketCap.com, but some of that was lost, Copper 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 not yet been exploited (see attached chart):
through Copper.co
Copper said that because most investors are long-term owners, representing eight out of 10 cryptocurrency holders, the growing appetite for the world’s most popular digital asset may have an oversized effect on stocks.
Researchers said raising bitcoin over $ 40,000 was already at stake just before Tesla Inc. TSLA,
made a surprise filing with regulators on Monday, declaring its $ 1.5 billion investment in bitcoin and the decision to finally allow customers to purchase their products with bitcoin.
“The data shows that new investors have raised prices much higher in
the last six months of 2020, to purchase north of 2 [million] bitcoins, ”Copper researchers wrote in the study.
“In order to be able to buy bitcoin in such deep quantities, the price has risen
well above the $ 20,000 value that helped convince early investors
to sell their cryptocurrency above the maximum level of the past, ”they said.
The cryptocurrency market is based on a new offering of about 3.2 million bitcoins on the stock exchange and held by traders, according to the report.
The study also found that investors who owned at least 1,000 bitcoins for about three months increased their holdings in 2020 by 173%.
This growing demand, combined with this constrained supply, has helped raise bitcoin values to a total market value of about $ 800 billion, and Copper said the main driver of demand was North American buyers receiving the supply. to Asian miners.
“The price increase is the result of a marriage of demand and liquidity
it happened at the beginning of 2020, when the exits from the exchanges – that is
Bitcoins being moved to self-custody – they have increased significantly “, the company’s research found.
Copper also made an interesting finding, noting that nearly a third of bitcoin trading volume takes place during the period when the New York Stock Exchange is open and investors should focus on trading in DJIA Dow Jones Industrial Average ,
and the S&P 500 SPX index,
That much of bitcoin trading takes place during trading hours, between 9:30 a.m. and 4:00 p.m., may explain why S&P 500 movements are sometimes seen as correlated with bitcoin prices, Copper wrote.