In late 2017, Bitcoin went on a tremendous rally and nearly eclipsed the $20,000 mark. According to The New York Times, however, that run was largely driven by investors in Asia that were just learning about cryptocurrency. Once the risk and other questions had time to sink in, the selloff was hot and heavy. Just one year later, the value of a single Bitcoin had plummeted from north of $19,000 to under $4,000.
It’s late 2020 and Bitcoin is on another run, recently surpassing its previous high mark, but the road taken thus far looks much different than it did in 2017.
According to an analysis from data firm Chainalysis, buyers this time around include traditional investors that are treating Bitcoin as an alternative asset and using it to diversify their portfolios rather than quickly trading in and out.
Philip Gradwell, the chief economist at Chainalysis, said the people that have been buying Bitcoin recently are “doing it in steadier amounts over sustained periods of time, and they are taking it off exchanges and holding it as an investment.”
PayPal is one of the American companies leading the latest surge. Last month, the financial services company started allowing its US-based users to buy, hold and sell select cryptocurrencies including Bitcoin.
PayPal Chief Executive Dan Schulman told The Times in a recent interview that three to four times as many people joined its wait list when the news was first announced than they had anticipated, adding that their decision to support crypto “came as a result of conversations with government officials, and then seeing the dramatic shift into digital payments as a result of the pandemic.”