After the long crypto winter, the market is showing serious positive signs. Bitcoin, which detractors claimed would cost $0 at the end of the bear market, has almost quadrupled its price since December 2018. The events of the past month have already been classified as a “Bitcoin bull run”. Today we are going to look back at the Bitcoin bull run of 2017, and compare it with what’s been happening recently.

Bitcoin Price Change

Bitcoin came all the way from $4k in October 2017 to almost $20k on Dec.17, 2017 in less than 2 months. The recent Bitcoin bull run could not hold a candle to such an explosive pace. It took almost 3 months to reach $12k starting at $4k in April. However, the not-as-fast growth can be directly linked to the not-as-fast decrease that followed the peak. Bitcoin stayed on top for a month in December 2017 - January 2018, before its correction to $10-11k. This time around, no significant corrections have occurred, and Bitcoin price is still hovering around the $12k mark.

Bitcoin price and market cap chart. Source: COIN360

Altcoin Prices

Although the 2017 Bitcoin bull run had a direct influence on altcoins and made their prices rise, the effect was not immediate. For example, Ethereum reached its all-time high of $1,433 almost a month after Bitcoin hit $20k, on Jan. 13, 2018. When Bitcoin was at its peak on Dec. 17, 2017, Ethereum was trading at $724, and its price began growing while Bitcoin was on its way down. When Bitcoin was around $11k at the beginning of December 2017, Ethereum was trading at $470. It’s interesting to compare those market conditions with the current ones, wherein it seems like Ethereum is underperforming. At press time, BTC is $13,013, while ETH is only $308.

Top cryptocurrencies prices have been showing strong correlations with Bitcoin price recently (and they didn’t in December 2017).

Top cryptocurrencies prices correlation. Source: CoinMetrics

However, the average correlation between Bitcoin and other cryptocurrencies in Q2 2019 became lower than it was in Q1 2019: it dropped from 0.73 to 0.61. Allegedly it happened due to a potential “flight-to-quality” in the recent bull run, which has a far bigger influence on Bitcoin, than on altcoins.

Several crypto experts have shared their skepticism on altcoins. According to Peter Brandt, a trader and author, altcoins won’t follow Bitcoin to the moon this time.

Peter Brandt claims that altcoins will not rise during the Bitcoin bull run.

Max Keiser, an American broadcaster, suggests that “all the cash is going to flow into Bitcoin” while “the altcoin phenomenon is finished”. He claims that Bitcoin is the most secure chain, and with recent developments such as the Lightning Network, it will make crypto owners move their funds back to Bitcoin.

Bitcoin Dominance

Before the bull run of 2017, Bitcoin had been dominating the market for years with a consistent market share of more than 80% and peaks of over 90% during certain periods. In March 2017 the situation changed significantly as Bitcoin market share started plummeting. In June 2017 Bitcoin had barely 39%, while Ethereum had 31.5% It began recovering in autumn, reached 60% at the end of October 2017 and stayed on this mark before the bull run in December. After that, it plummeted to 33% in January 2018, its all-time low. The phenomenon was dubbed as “the altcoin season”.

Market cap Bitcoin dominance. Source: TradingView

During the bear market of 2018, Bitcoin’s market share hovered around 50%, until it started to rise along with its price. On July 9, 2019, Bitcoin’s dominance hit a new 19-month high, with over 66% of the market share.

Active Bitcoin Addresses

Bitcoin had the most active addresses, 1.29 million, on Dec. 14, 2017. This number significantly decreased in spring 2018, and never surpassed the 1 million mark in 2018 again.

Number of Bitcoin addresses. Source: CoinMetrics

Though the current number of Bitcoin addresses is relatively low compared to the all-time high of December 2017, this parameter is also showing considerable improvements. June 2019 has marked an important milestone, as Bitcoin surpassed 1 million daily active addresses, a number we haven’t seen since January 2018. It is now at comparable levels to those of November 2017, and it might retest the all-time high soon.

Bitcoin Fees

At its peak, on Dec. 22, 2017, Bitcoin’s average transaction fee reached $56. Before reaching the peak, it was hovering around $7 in November 2017.

Bitcoin average transaction fee. Source: CoinMetrics

Bitcoin’s average transaction fee is a very important metric, as it can indicate whether the blockchain is overloaded by transactions or not. Miners give priority to high fee transactions, so the higher an average transaction fee is, the higher the network overload is. At the moment, there are no signs of overload, as the average transaction fee in July remains below $4. For reference, it was $2.2 on July 8, 2019.

Bitcoin Transaction Value

On Dec. 4, 2017, 629.5k Bitcoins were moved on the blockchain. We have never seen a transaction volume close to this again. In November 2017 transaction volume was much lower, and it was even bearish for stretches of 2018.

Estimated Bitcoin transaction value.

Some analysts noted that the Bitcoin network showed signs of bull market back in April 2019, when Bitcoin transaction daily volume hit highs not seen since 2017. In April the network came close to the 300k BTC barrier, which was eventually crossed in June, where we saw a maximum of 329k Bitcoins transferred per day.

Bitcoin Hash Rate

The Bitcoin hash rate is an outstanding metric, which, unlike others, was higher during the bear market than in December 2017. Hash rate is the overall computing power of the Bitcoin network, and it can generally reflect user interest in mining.

Bitcoin hash rate.

As the chart shows, in December 2017 and January 2018, Bitcoin’s hash rate did not exceed 20M tera hashes per second. In January 2019, when Bitcoin’s price plummeted to $3.5k, its hash rate was still higher and didn’t fall below 35M tera hashes per second.

June 2019 brought with it some new all-time highs, and on July 5, another record was set, with 74.5 million tera hashes per second. This data was seen rather optimistically, as the hash rate is believed to lead the price.

Private Investors

Mainstream interest in Bitcoin peaked in Dec. 17-23, 2017, according to Google Trends search volume. December 2017 search volumes still hold the peak popularity for “Bitcoin” term, as well as for “cryptocurrency”, “buy Bitcoin” and “Ethereum”. Nonetheless, the recent market momentum has caused significant growth in “Bitcoin” search queries. In June 2019 it reached its highest levels since February 2018. However, the search volume then was almost 4 times lower than the all-time high of December 2017.

Google Trends search volume for Bitcoin.

This doesn’t mean that private investors are not interested in Bitcoin at all. According to the latest report, peer-to-peer Bitcoin exchange LocalBitcoins hit $65.6M in weekly trading volume last week, its highest level since November 2018. However, during the Bitcoin bull run of 2017, the trading volume on LocalBitcoins was much higher, around $120M per week, and it peaked at $129.5M for the week which ended on Dec. 23, 2017.

Institutional Investors

Some experts claim that the current bull run is led mostly by institutional investors, not speculative retail traders as it was in 2017.

Grayscale, an American digital asset management company, reported a 40% increase in capital inflow, from $30M in Q4 2018 to $43M in Q1 2019, with 99% investments to Grayscale Bitcoin Trust. As of July 9, 2019, the investment instrument has had an almost 300% rise in value YTD. Though during the 2017 bull run, the GBTC reflected an appreciation of almost 1,400% YTD. It was reported that in Q1 2019, 73% of all investments were made by institutional investors.

Grayscale Bitcoin Trust (GBTC). Source: WSJ

A survey by Fidelity Investments was published in May 2019 with more than 400 US institutional investors interviewed. The survey showed that 22% of institutional investors have already had some exposure to digital assets, while 47% were planning to hold digital assets in the future.

Bitcoin CME Futures

Bitcoin Futures were first listed on CME in the midst of the previous bull run, in December 2017, and it’s possible that their novelty is behind their lack of demand at that time. Statistics show that the average daily volume in December was lower compared to the following months.

May and June of 2019 have set new records in BTC futures average daily volume and average daily Open Interest. In June the Open Interest surpassed the 6,000 mark, a 30% surge from 4,600 in May. The average daily volume in May reached 13,600 contracts, almost 30% higher than a month before.

CME Bitcoin futures average daily volume.

Though Bitcoin futures trading is still far from mass adoption, 2019 marked a 30% increase in client sign-ups, and now a total of almost 3,000 accounts have traded CME Bitcoin futures.

Final Thoughts

Bitcoin has overcome the challenges of the bearish market, and, against all odds, is showing significant improvements. Much has changed since the Bitcoin bull run in 2017. It seems that today the hype around Bitcoin and cryptocurrencies is not as volatile as almost 2 years ago. Private investors might not be as interested in crypto as they were back then, but Bitcoin infrastructure is more ready to attract institutional investors, than it was in 2017. Moreover, the blockchain is not overloaded by transactions, which means that the current rally might have more potential and the price may skyrocket later this year.

Thanks for reading,

The COIN360 Editorial Team