When will the 2020 Bitcoin "bubble" burst?

In recent weeks and days, the crypto market has exploded again, with Bitcoin hitting new all-time highs by market capitalization, returning to the levels seen at the end of 2017. But we all know what happened shortly after 2017...

In recent weeks and days, the crypto market has exploded again, with Bitcoin hitting new all-time highs by market cap, returning to levels last seen in late 2017. But we all know what happened shortly after 2017... Bitcoin spent the next few years in the doldrums following that bubble burst, failing to recover.

So the question we are asking now is: are we in a bubble like 2017 again, or will Bitcoin explode for good this time?

In this article, we will try to address this question as reasonably and objectively as possible.

What happened in 2017

At the beginning of 2017, the price of Bitcoin was still fluctuating around $1,000.

In the following 10 months, the price of Bitcoin has been fluctuating steadily, and the price of Bitcoin has been stable between $4,000 and $5,000 around October 2017. Suddenly, something triggered a domino effect: Bitcoin gained more and more attention on social media, and then even mainstream media began to report on Bitcoin.

Below is a graph showing the number of people searching for “Bitcoin” on Google in 2017

In just a few weeks, Bitcoin suddenly became a household name and its price soared to $20,000. Then, in early 2018, after growing 20 times, Bitcoin suddenly crashed (and is only now recovering).

So what’s the reason for Bitcoin’s sudden surge?

In short, it was an incredible FOMO (fear of missing out). Everyone wanted to get rich quick and invested in Bitcoin without a second thought because they were afraid of losing and being a loser.

Will the same thing happen again in 2020?

The market situation today is very different from three years ago. Of course, the same thing is that we are once again at all-time highs, and few or no addresses are still in the red.

However, the reality is that retail investors (private investors) do not seem to react to this wave of market, or the reaction is far less intense than in 2017. Even in the summer of 2020, people's general interest in Bitcoin was higher than the current situation. Now the level of interest is not even close to the value at the end of 2017.

Could it be that they haven’t realized that the bull market has arrived… That shouldn’t be the case. Then the reasonable explanation might be that most people have not gained gratifying benefits from this wave of rise.

According to reports from multiple media outlets and market information collection, the current inflow of funds mainly comes from institutional investors with large amounts of money, who have already included Bitcoin as an asset in their portfolios. In general, Bitcoin is gaining more and more acceptance, even among institutions and many large companies.

For example, PayPal only recently integrated Bitcoin into its systems and now allows buying, selling and trading in Bitcoin in the United States, with plans to roll out this feature globally soon.

This makes this big market more like an institutional carnival, and retail and individual investors are mostly watching their happiness. Unlike the grand occasion in 2017, after the bull market came, we found that our relatives and friends rarely asked about Bitcoin or the crypto market, and the mainstream media did not report on it in detail... From an investment perspective, this is actually a very good thing.

Of course, there are many reasons why it did not attract widespread attention. It may be because the global economic situation has changed significantly this year, and the stock market or gold market has also experienced large fluctuations, attracting more attention from traditional market investors and media.

Judging from the overall market situation, the current crypto market is more like the beginning of 2017 rather than the end of 2017... Therefore, the Bitcoin "bubble" in 2020 may not have really arrived yet.

So, does it make sense to invest in Bitcoin now?

When it comes to investing, there are two wrong behaviors in terms of investment amount: investing 0% of the funds and investing 100% of the funds.

Once full FOMO sets in, it’s definitely not a good idea to panic and throw all your money into Bitcoin.

However, not investing a penny in Bitcoin does not seem to be a good thing. More and more professional investors have realized this and choose to allocate part of their assets to Bitcoin. As mentioned earlier, this is actually the main driving factor for the current price increase.