This is four reasons why Bitcoin is repared to the moon

By Tsunami On May 28, 2020

Bitcoin led the entire crypto market to rally higher overnight, with a continued defense of $8,800 catalyzing some immense momentum that has allowed the market to add nearly $10 billion to its market capitalization.

Source: Tradingview, Coinbase

Although today’s rally is an overtly bullish sign, it is important to note that analysts remain cautious about where the market may trend in the days and weeks ahead.

With the price breaking out once again, there is a confluence of signs suggesting Bitcoin could rally past its monthly high of $10,000 in the near future. Here are some of these signs.

1. On-Chain Activity Still Bullish

Bitcoin’s network activity has remained strong in spite of the correction from the $10,000 highs.

Blockchain analytics upstart Santiment shared late last week that BTC’s Network Value to Transactions Ratio (NVT) remains “healthy.”

In spite of $BTC‘s mild -4.4% downswing today, its NVT looks healthy, and our model is showing a semi-bullish signal. The amount of unique tokens being transacted on #Bitcoin‘s network is slightly above average for in May, according to where price levels currently sit. ? pic.twitter.com/3BIcqTS3VN

— Santiment (@santimentfeed) May 22, 2020

2. Institutional interest in the crypto space seems to be surging

Grayscale, one of the largest digital asset funds in the crypto space, has seen a surge in new investments in 2020. The Grayscale Invest Bitcoin Trust has bought 18,910 Bitcoin since the halving. However, only 12,337 Bitcoin have been mined since that date. There is a rapidly growing institutional demand for Bitcoin in the United States.

According to data compiled by Kevin Rooke, Grayscale bought approximately 6,300 Bitcoin more than what was mined since the halving.

Grayscale offers investors a variety of digital assets. Accounting for almost 90% of the fund’s total assets-under-management, the Bitcoin Trust is the most popular digital asset trust among investors.

Grayscale’s Bitcoin Trust allows investors to invest in Bitcoin without having to buy or store the digital asset securely. In exchange, Grayscale charges investors a slight premium. Each share currently holds $8.69 in Bitcoin with a market price per share of $10.54.

3. Money Printing Continues

Japan will compile a new 117.1 trillion yen ($1.1 trillion) stimulus package that includes significant direct spending, to stop the coronavirus pandemic pushing the world’s third-largest economy deeper into recession, a budget draft seen by Reuters showed on Wednesday.

People queue while waiting for a bus near Shibuya Station in Tokyo on Wednesday. Photo: REUTERS/Kim Kyung-Hoon

Japan’s first 117 trillion yen package in April centered on cash payouts to households and steps to cope with the immediate damage from the pandemic.

Investors like Paul Tudor Jones — a hedge fund manager worth billions — believe that stimulus like that of Japan and others will cause monetary inflation. This could drive demand for scarce assets like Bitcoin and gold.

4. Hong Kong crisis, Currency War, boosting Bitcoin bullish

The Chinese government recently proposed a new security law for the region of Hong Kong, a special administrative region in China formerly of the British. “Growing terrorism” is the stated premise of the bill, but many in the global community and many of Hong Kong’s citizens think that it is an encroachment on democracy in the city.

Bitcoin stands to benefit from this law due to the global response against China, despite the law not even being passed.

Due to the fears of sanctions on China, the value of the Chinese yuan has sunk against the U.S. dollar, reaching lows not seen since the peak of the trade war last year.

The yuan weakening could boost Bitcoin, with Jeff Dorman of crypto fund Arca saying:

“In Spring/Summer 2019, the Chinese Yuan fell to all-time lows vs the USD, and contributed greatly to BTC appreciation. Conversely, when the Yuan strengthened in Fall 2019, BTC tumbled. Guess who’s back to all time lows?”