Bitcoin, Ethereum and a number of other major cryptocurrencies have practically come to a standstill in the past two to three months. According to the Bollinger Bands, the volatility of Bitcoin is at lows that have not been observed since November 2018.
But according to Max Bronstein, part of Coinbase's venture and institutional arm, the crypto market is actually in an exciting phase. However, it remains to be seen when the price of Bitcoin will follow.
3 signals show that cryptocurrencies could experience a 2017-like boom
According to Bronstein, there are three clear signs that Bitcoin will soon trade at the level of the 2017 boom and probably even beyond ”. The COINBASE employee shared three data points from Glassnode and Dune Analytics, two data providers in the crypto space, who support this extreme claim. They are as follows:
- Ethereum's daily transaction count is at multi-year highs as this metric is regularly over 1,000,000 as DeFi becomes more popular.
- The number of Bitcoin addresses / holders with more than one coin has reached an all-time high of over 822,500. This number is above the approximately 782,000 at the beginning of the year.
- The number of DeFi users is literally going through the roof, with Uniswap, Synthetix and 1INCH making up the largest part of the growth.
In previous comments, Bronstein said that the current macroeconomic environment is strongly encouraging the growth of Bitcoin and Ethereum . In a Twitter thread published in March, he wrote, referring to unprecedented money pressure, lockdowns and other macroeconomic trends, that the current macroeconomic environment is strongly conducive to the growth of Bitcoin and Ethereum:
“ALL OF THIS ADDS UP TO THE BIGGEST TEST OF BITCOIN'S VALUE PROPOSITION. THE LOWER LIMITS OF DEBT-BASED MONETARY SYSTEMS CONTINUE TO SHRINK EVERY DAY, AND THE NEED FOR A DECENTRALIZED ALTERNATIVE HAS NEVER BEEN AS GREAT AS IT IS TODAY.
Wall Street is needed to take Bitcoin and Ethereum to new heights
Given that the crypto industry appears to be in an extremely positive fundamental position, it may be puzzling to some why Bitcoin's price isn't trying to hit its previous high of $ 20,000.
Despite the upward trend in the adoption of the underlying technology, an analyst says Wall Street is necessary to push the price of cryptocurrencies to new heights. This analyst, who is called “Ceteris Paribus” on Twitter, commented on the topic last week:
"DEFI CAN RECOVER WITHOUT A TON OF NEW FUNDS, BUT BTC / ETH HAS GOTTEN TO THE POINT WHERE THEY NEED REAL, INSTITUTIONAL / MACROECONOMIC CASH FLOWS TO GO TO THE NEXT LEVEL."
Fortunately for the Bitcoin bulls, there is data suggesting that institutional inflows are finally coming. Just last week, Grayscale Investments released its latest quarterly / semi-annual report. The company wrote that it had the greatest capital inflow ever:
“GRAYSCALE HAD ITS LARGEST QUARTERLY CASH INFLOWS, $ 905.8 MILLION IN THE SECOND QUARTER, ALMOST DOUBLE THE PREVIOUS QUARTERLY HIGH OF $ 503.7 MILLION IN THE FIRST QUARTER. FOR THE FIRST TIME, THE INFLOWS INTO GRAYSCALE PRODUCTS EXCEEDED A PERIOD OF 6 MONTHS THE $ 1 BILLION THRESHOLD ”.
