In fact, it has reached peaks that had never been seen since January 2018, when the speculative bubble at the end of 2017 was bursting.
In fact, already in the middle of last year, when Facebook announced the Libra project, the price exceeded $13,000, but it did so for a very short time, without being able to reach $14,000.
What’s different now than then?
The main difference most likely is the May 2020 halving, which has actually reduced BTC’s offer on the market.
It should not be forgotten that bitcoin mining has very high costs that very often have to be paid in fiat currency. This means that a large part of the new BTCs cashed with mining have to be sold relatively quickly in order to finance the mining activity.
In addition, after the halving of the mining premium, the hashrate paradoxically increased over the months, increasing the costs of mining itself.
In May, at the same time as halving, it had reached a new record, only to go down and up again, setting an even higher record in mid-October.
However, since BTCs mined are half as high as at the beginning of the year, the supply on the market since May is probably still declining in the medium term.
Bitcoin price growth in October 2020
But why has there been the most significant increase since October 8th?
In fact, throughout 2020 it had fluctuated more or less around $10,000, with a peak at over $12,000 in August, but only in October it broke through the $13,000 wall.
Almost certainly the main triggering event was the announcement of PayPal. Although it had already been assumed in June, and although the price had already risen above $11,000 even before the final announcement, the push to $13,000 most likely came from there. But there are also other events behind that +30% in 20 days.
The continuous purchase of bitcoins on the market by listed companies such as Microstrategy, which use it as a store of value, must have played a role as well.
However, it must be said that this is a phenomenon that started in August, when BTC’s price first tried to break through the $13,000 wall without succeeding.
According to some people it is possible that the increase of the last weeks has also been affected by the upcoming U.S. presidential elections, although there are different views on how it could have affected.
However, there may also be some temporary inverse correlation with the US stock markets, and in particular with the Nasdaq index, which has been declining on average since October 12. From this point of view, however, no evidence has yet emerged that could make it clear and precise which inverse correlation it could be.
What is certain, however, is that in the course especially of the second half of 2020 more and more financial institutions, including banks, seem to be ceasing to be hostile to Bitcoin and taking it more and more seriously.
At a time of falling supply, due to halving, this may have prevented a drop in demand of the same magnitude.