With the increase of trading volume of bitcoin, will its price continue to rise?

Bitcoin’s growth this quarter has been affected by the low supply of bitcoin trading and its highly stable money supply, which have historically been the secret of price rise. As bitcoin’s exchange trading volume rises and its dominant position gradually returns to its former high, the altcoin boom is coming. At the time of writing, bitcoin’s market dominance rose from 60% to 61.4%. As for other cryptocurrencies in the market, double-digit growth of Polkadot, Cardano, XRP, BNB, LTC and BCH has become normal recently, and almost all important indicators point to the rise of bitcoin. In addition to important indicators supporting the bullish view of bitcoin, institutions and crypto trusts are locking in a large number of bitcoin and Ethereum behind the spot and derivatives. As of February 16, 2021, the gray bitcoin trust fund has increased its holdings of 650000 bitcoins, reducing the supply of bitcoin in circulation to 14 million. According to coinmetrics, bitcoin is in circulation, with a supply of slightly more than 14 million, compared with the current total supply of 18.6 million. This floating supply can be traded by exchanges and institutions. Among the top institutions that own bitcoin trust funds, grayscale owns more than $31 billion worth of bitcoin. In addition, a large part of the supply of bitcoin is not in circulation. Since 2020, less than 45% of bitcoin has been in circulation on the Internet. Although prices hit a new high of $50000 on top exchanges, more than 55% of bitcoin remains dormant. Although the proportion of active supply in 5y-7y has increased significantly in the past few weeks, it is still very low, only 45%. We should also note that, according to the data warned by glassnode, the supply of 1y-2y has declined in the past three weeks, fueling the optimism that prices will rise. In addition to the activities of trust and the status quo of bitcoin, CME futures company provides institutional investors with exposure to bitcoin derivatives, which opens up new investment channels for institutional clients. Institutional customers can choose to deposit bitcoin in the gray bitcoin trust fund and short bitcoin on the Chicago Mercantile Exchange. Based on the premium from gray companies, customers will get extra bitcoin. As long as the premium is still relatively high, it will become one of the main reasons why gray companies continue to attract institutional customers. With the increase of trading volume on the spot exchange and the Chicago Mercantile Exchange, prices are likely to continue to rise in the current market cycle. The original text is from ambrypto and edited by blockchain knight. The English copyright belongs to the original author. Please contact the compiler for Chinese reprint.

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