This week in Bitcoin price: Nov 1-7
Bitcoin surges past $15,000 against the backdrop of the still-undecided U.S. presidential election. What’s driving the market? Get the info you need to make the most informed trades with our weekly dispatch from Coinbase’s analytics team.
Published on November 7, 2020
The big picture
It’s been another strong week for Bitcoin. Price climbed 14%, breaking the $15,000 barrier for the first time since January of 2018. Across all major exchanges, a new influx of fiat currency investment accompanied the price’s rise.
The biggest news of the week, of course, was the U.S. presidential election – which hasn’t been called as of this AM but is looking favorable to the Biden/Harris ticket.
How much of an impact did the election have on the week’s prices? What other factors contributed to Bitcoin’s rally, which is now in it’s fourth week after hovering around the $10,000 level for most of September? All that and more in this week’s report.
When we see a rally like this, we are often asked where it’s coming from and whether it will continue.The second question is anyone's guess, but we can certainly look into the data and see if we can learn something about the first. Using blockchain-analysis software, data scientists on the Coinbase Analytics team have done some great research.
Because Bitcoin has been on a run for some time, it’s hard to tease out exactly how much impact the election had on the recent spike. Conventional wisdom tells us that scarce assets like gold, on which Bitcoin is in some ways modeled, rise in uncertain times. So election uncertainty could have motivated some buyers.
But the bigger explanation is likely around the effect that fast-rising prices themselves have on people’s interest in Bitcoin.
Bitcoin benefitted from a surge of fiat-currency investment across all major exchanges. In this graph, you can see a major spike in the blue bars representing “BTC Inflows” – new money coming into the market – as price (the red line) spiked yesterday.
One key question when prices spike is around how much money people will pull out of Bitcoin in the form of profit? Typically a scenario like this creates “sell pressure,” in which individuals or funds decide to take some profits as the price goes up.
While this may have happened, it wasn’t the prevailing trend. Instead, more fiat currency entered the market than usual as Bitcoin approached $15,000 yesterday.
One interesting trend the analytics desk observed was that a broader consortium of investors than usual were part of this surge – beyond the typical participants in the crypto market (people who work in finance or for VC funds etc). We’re seeing interest from people in industries including the media, real estate, and entertainment. These haven’t traditionally been investors with major interest in crypto or Bitcoin, and it’s a positive sign that the current rally is attracting them.
Across all crypto assets traded on the Coinbase exchange, $1.2 billion in volume was traded yesterday – making it the second-highest day of the last 12 months. You can see that spike in this chart:
Bitcoin vs other assets
The broader backdrop to this week’s Bitcoin story included the stock market’s best week since April (although it flattened off in the days after the election as investors awaited the results). COVID cases increased throughout almost all of the United States. 638,000 jobs were added to the economy, beating projections by more than 50,000.
In this chart you can see how Bitcoin’s performance over the week compares with a variety of other assets.
Unsurprisingly, Bitcoin was a hot topic on social media this week. More Twitter users were talking about it yesterday than any other day this year except one.
Want to read more?
Here are a few of the week’s crypto headlines recommended by the analytics desk.
October was a massive month for bitcoin options (The Block)