Which top factors drive the Bitcoin Bull Market?
Digital assets are perfect investing instruments. These are not affected by inflation processes, but are significantly volatile; hence, investors have the opportunity to increase their wealth. Bitcoin is
the reference point for all crypto investors, since the oldest virtual currency is the most dominant on the market.
There are some factors that lead to bullish trends. Crypto hodlers are expected to follow these factors to understand which time is the best to purchase or sell BTC.
General factors to drive the crypto market
The experts point out some general factors that affect cryptocurrencies’ rates:
mass media:
Mass media is considered an effective measure of influence. As for digital assets, this factor may impact on short-term rates. The crypto market is sensitive to global news which takes place within the economic and political spheres.
fear factor:
The crypto analytics calculate the Fear & Greed Index to show investors’ sentiments. When the index is lower than 50, investors’ sentiments are regarded as ‘Fear’. Such an index represents the bearish trend. In August 2020, the index reached 84 points, which is the year all-time high measure.
scientific progress:
New platforms, innovative functions, and blockchain technology implementation attract new investors. The crypto market growth is based on the opposition to traditional economic grounds.
interdependence:
The Bitcoin market is understood to be the basis for the crypto market in general; hence, any changes of the first virtual currency rates are reflected on altcoins instantly.
The COVID Pandemic and its impact on investors’ sentiments
The COVID Pandemic is challenging the traditional financial system, and investors are looking for alternative instruments to invest their funds in. The pandemic is about to trigger a global crisis, making investors want to diversify their portfolios. Even the most conservative investors predict a continuous collapse within the stock market.
When an investor faces a global crisis, they start purchasing so-called defensive assets. Precious metals like gold or silver are primarily considered as ‘safe assets’, and Bitcoin is now far from that status. Meanwhile, the first cryptocurrency has a similar trajectory: its maximal supply is limited, while the price is expected to grow.
The number of Bitcoin investors has rapidly increased in 2020. The experts highlighted the positive impact of COVID-19 in the crypto market. The pandemic revealed all fiat assets’ problems, while
Bitcoin offers the highest return on investments compared to other investing opportunities.
Inactive wallets: why investors HODL Bitcoins?
Inactive BTC wallets show that hodlers are convinced the Bitcoin price is actually higher than the market suggests. At the present time, the number of inactive wallets reached its peak. Investors prefer to keep their crypto assets ‘for dear life’. Bitcoin HODL waves are illustrated by the following table (based on the Unchained Capital statistics):
| Number of wallets, inactive for | 2010 | 2012 | 2014 | 2016 | 2018 | 2020 |
| less than 1 day | 0,42% | 1,44% | 1,09% | 1,31% | 1,70% | 1,91% |
| 1 day – 1 week | 3,34% | 6,27% | 3,35% | 2,50% | 5,97% | 2,92% |
| 1 week – 1 month | 11,83% | 9,64% | 12,53% | 7,55% | 12,44% | 4,56% |
| 1-3 months | 13,62% | 14,51% | 22,21% | 10,39% | 15,71% | 8,71% |
| 3-6 months | 14,73% | 9,81% | 7,00% | 6,47% | 14,06% | 9,40% |
| 6-12 months | 54,40% | 27,61% | 16,14% | 11,29% | 7,80% | 13,16% |
| 12-18 months | 1,67% | 8,47% | 4,89% | 8,24% | 4,15% | 10,81% |
| 18-24 months | 0,00% | 8,57% | 3,20% | 10,83% | 3,51% | 8,11% |
| 2-3 years | 0,00% | 12,39% | 12,60% | 17,81% | 5,02%, | 13,13% |
| 3-5 years | 0,00% | 0,80% | 16,77% | 10,24% | 12,83% | 5,43% |
| more than 5 years | 0,00% | 0,00% | 0,22% | 13,38% | 16,81% | 21,67% |
The number of inactive Bitcoin wallets augments dynamically. More than 59% of BTC wallets are inactive for at least 12 months. The number of wallets moved within a month is less than 10%. Such an index is an all-time low.
Crypto legislature: pro-Bitcoin solutions
Crypto market news is divided into events correlated with the sphere and official laws. The last ones impact the industry essentially.
The Bitcoin status depends on the individual country, while the recent solutions show governments are more favorable to the first cryptocurrency globally. Is crypto legal? New entrants are interested in learning what is the official status of digital assets.
At present, there are just 10 countries where Bitcoin is illegal. The list includes Algeria, Bangladesh, Saudi Arabia, Vietnam, etc. Nine more countries accept BTC with some restrictions connected with trading or using it as a payment method. As for other countries, citizens are free to purchase, hold, and trade Bitcoin and other cryptocurrencies. Thus, Bitcoin legislation is rather favorable.
Meanwhile, investors keep an eye on cryptocurrency legal regulation, as the smallest changes may affect the market in general.
For instance, Bitcoin is adopted as a payment method in a certain country, or BTC holders are enabled to pay taxes in crypto. Every cryptocurrency law, more or less, influences the market in general. The analysis of the regulation of cryptocurrency around the world shows that all legal steps gradually lead to the massive adoption of digital assets.
Thus, the indicated factors are among the most prominent drivers of the Bitcoin bull market, showing the crypto market potential gains momentum. Coinsbuy platform lists Bitcoin and other top-rated cryptocurrencies, hence, a user is able to invest in virtual currencies with the lowest fees.
