Bitcoin Price Finally Sees The Day Of Light At $5,000 BTC/USD, What’s Evolved Since Its First $5K Peak


Bitcoin Price Reaches $5,000 Which Are The Differences With 2017?

Bitcoin (BTC) was able to reach $5,000 for the first time in almost 5 months after the digital asset surpassed $4,200 on April 2. This helped the whole market reach levels that we have not seen for several months. Nonetheless, this is not the first time that Bitcoin is being traded around $5,000. Which are the main differences between $5,000 now compared to 2017?

Bitcoin Reaches $5,000

One of the first things that we can mention is the fact that the market has many new investors compared to what it was in 2017. The whole cryptocurrency market has a larger number of individuals participating in it.

There are new platforms that are offering services to crypto enthusiasts and also new ones are going to be released soon. At the same time, larger and institutional investors are getting prepared to enter the space and purchase digital currencies, including Bitcoin.

The market has also more regulations that make it much easier for investors to have access to the crypto space. Companies and developers are also now able to operate in a more predictable market than what it was back in 2017.

Fundamentals

Bitcoin has two other important things that in 2017 did not exist or were just at very early stages of their developments. We are talking about Segregated Witness (SegWit) and the Lightning Network (LN). For the first time ever, the daily median transactions per block have reached 1,000 back on March 30. With the SegWit upgrade, it was possible to free some space in each of the blocks.

The Segregated Witness solution was created in order to improve Bitcoin’s scalability. The digital asset has been experiencing scaling issues that were not allowing it to grow and expand. With a larger number of interested users, a solution was necessary. With SegWit, Bitcoin reduces the size of each transaction, allowing each block to have more space to process a larger number of payments.

Although not all the exchanges and companies have embraced Segregated Witness, almost half of the transactions are now processed between SegWit addresses.

Meanwhile, the Lightning Network (LN) has also been developed during the last few months and has been proposed as a solution for the scaling issues faced by Bitcoin. This second layer scaling solution has been growing throughout 2018. Users will eventually be able to process micropayments and also thousands of transactions per second without congesting the network.

According to 1ml.com, the LN has a capacity of $5.36 million, 7,800 nodes and over 38,950 channels. This is expected to improve Bitcoin adoption and solve the scaling issues if there is an increase in the number of transactions processed by the network.

Back in 2017, when the bull market entered its last phase, the whole Bitcoin network was congested. It was difficult to process a transaction on times and users had to pay very high fees if they wanted their transactions to be processed.

Network Usage Shifts

The network has also experienced a shift from retail investors to institutions. Although retail traders are still operating in the market, there is an increased interest from institutions to trade Bitcoin. When Bitcoin surpassed $5,000 the interest from institutions, family offices, and larger investors increased substantially.

Not only this, but there are also several platforms that are working in order to create institutional-based services for users in the space. We can mention Fidelity Investments with its subsidiary Fidelity Digital Assets that wants to provide institutions and larger investors services related to virtual currencies. Another firm that is trying to enter the market is the Intercontinental Exchange (ICE) with the Bakkt platform specifically designed for larger players that want to have access to virtual currencies.

These two firms, among others, were not present back in 2017. That means that everything is getting prepared to receive a larger influx of investments in the coming months and years.

Finally, there is another thing to mention. There is a shift in the regions that are interested in virtual currencies. Countries such as Japan, South Korea, China, and others have been highly interested in digital assets. However, there are new places in which virtual currencies have also been expanding at very fast rates.

Some of these countries include Venezuela, Argentina or Turkey. These three countries have experienced large economic crises in 2018. Although these nations have different problems and issues to face, the interest in virtual currencies has surged. Venezuela, Argentina, and Turkey have very weak fiat currencies. In the last few years, these countries experienced currency crisis. Venezuela has hyperinflation, Argentina’s inflationary rates reached 50% annually and in Turkey, inflation has accelerated considerably in the last months.

In Venezuela, people are using digital assets so as to transact funds and store value. There are many families that are divided and that have relatives living abroad sending funds back to their country. Due to the fact that all the banking system is controlled by the government, people decided to send funds using Bitcoin or other virtual currencies and exchanging them through LocalBitcoins.

In Argentina, the tax rates are one of the highest in the world. Indeed, after Comoros, Argentina is the country with the largest tax rate in the world. Because of this and other reasons related to inflation and the lack of trust Argentinians have to their currency, they have decided to play an increasing role in the crypto market. Binance, for example, one of the largest cryptocurrency exchanges in the world, is planning to introduce a new fiat exchange in the country that would allow individuals to enter the space in a very easy way.

In Turkey, after a year in which their currency devaluated around 50% against the USD, individuals became highly interested in Bitcoin and other digital assets.

Conclusion

In sum, Bitcoin surpassing $5,000 now is completely different from Bitcoin surpassing $5,000 in 2017. Back in 2017, Bitcoin surpassed $5,000 for the first time and it was already a record for the digital asset. With all these developments taking place in the crypto space and the whole market, Bitcoin surpassing $5,000 seems a logic trend rather than a surprising move. There are several individuals and experts that believe that in the future the market will continue growing and Bitcoin reaching new highs.

At the time of writing this article, Bitcoin is being traded around $4,975 and it has a market capitalization of $87.72 billion, according to data provided by CoinMarketCap.

https://bitcoinexchangeguide.com/bitcoin-btc-ethereum-eth-and-litecoin-ltc-price-predictions-todays-crypto-market-analysis/

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