Bitcoin is hovering around $18,000 as of November 19, 2020, and the comparisons to the legendary 2017 bull run are inevitable. Back then, Bitcoin topped out at just under $20,000 before crashing spectacularly. But according to blockchain analytics firm Chainalysis, this rally has a completely different DNA — and it comes down to who is buying.
TL;DR
- Bitcoin trading at approximately $17,817, approaching the 2017 all-time high
- 77% of all mined Bitcoin is held in illiquid “investor” wallets, leaving only 3.4 million BTC available for trading
- Trade intensity on exchanges is 38% above the 180-day average
- Institutional players like Paul Tudor Jones and Square are leading the charge — not retail speculators
- Kraken reports $176 million in spot volume and $333.4 million in futures, 50% above its 30-day average
The Supply Squeeze No One Is Talking About
The fundamental driver behind Bitcoin’s November 2020 surge is a classic supply-demand imbalance. Chainalysis tracks Bitcoin held in wallets that send less than 25% of what they’ve ever received — classifying it as “illiquid” or investor-held Bitcoin. As of November 19, a staggering 77% of the 14.8 million Bitcoin that isn’t considered lost is locked away in these illiquid wallets.
That leaves just 3.4 million Bitcoin readily available to buyers who want in. Meanwhile, demand metrics are flashing green across the board. Trade intensity — which measures how many times each Bitcoin deposited on a spot exchange gets traded before being withdrawn — currently sits 38% above the 180-day average. In plain terms: more people are chasing fewer coins.
Institutional Money Changes Everything
The single biggest difference between 2020 and 2017 is the profile of the buyer. In 2017, the rally was powered largely by individual retail investors, many of whom were new to cryptocurrency and driven by FOMO. Fast forward to 2020, and the narrative has shifted dramatically.
Legendary hedge fund manager Paul Tudor Jones publicly compared buying Bitcoin to investing early in Apple or Google — high praise from someone managing billions. Payments company Square invested $50 million in Bitcoin as part of its corporate treasury strategy. These aren’t retail punters hoping for a quick flip. They’re sophisticated investors treating Bitcoin as a legitimate store of value and hedge against monetary debasement.
The Kraken exchange’s daily market report for November 19 underscores this institutional momentum. Total spot trading volume reached $176 million, while futures notional hit $333.4 million — roughly 50% higher than its 30-day average. This isn’t the kind of volume generated by casual hobby traders.
Ethereum Takes a Breather While Altcoins Stir
While Bitcoin held steady at $17,835 (up 0.12% on the day according to Kraken), Ethereum actually dipped 1.7% to $471.96. The divergence suggests that capital is flowing primarily into Bitcoin rather than rotating across the broader crypto market. Litecoin, however, had a standout session, surging 11% to $81.63 and ranking as the fourth most traded asset on Kraken behind Bitcoin, Ethereum, and Tether.
DeFi tokens showed mixed but notable activity. Yearn.finance (YFI) gained 8.7% to $27,776, while Uniswap’s UNI token climbed 7.6% to $3.73. The total value locked in DeFi protocols reached approximately $12 billion in November 2020, signaling that decentralized finance continues to attract significant capital even as Bitcoin dominates headlines.
Why This Matters
The 2020 Bitcoin rally isn’t built on hype — it’s built on fundamentals. Institutional adoption, a shrinking liquid supply, and unprecedented monetary stimulus from central banks worldwide have created a perfect storm for Bitcoin’s price appreciation. Unlike 2017, where the rally was fragile and retail-driven, this cycle has the backing of some of Wall Street’s most respected names.
However, history offers a cautionary tale. As noted in market analysis from November 19, Bitcoin’s previous bull markets experienced multiple corrections of 30-40% even during sustained uptrends. Volatility is the price of admission in crypto, and investors should expect significant pullbacks even if the overall trajectory remains bullish.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments carry significant risk. Always do your own research before making investment decisions.
77% of mined BTC in illiquid wallets with only 3.4M available for trading. Chainalysis nailed the supply squeeze thesis before most people saw it coming
Kraken doing $176M spot and $333M futures, 50% above 30-day average. the volume was telling you everything you needed to know about where BTC was heading
kraken doing $333M in futures alone. that was institutional flow building positions while retail argued about 2017 comparisons on twitter
derivs_archivist kraken futures volume at 333M was the tell. smart money was building longs while retail debated whether 2017 was repeating
3.4M BTC available for trading and institutions kept pulling supply off exchanges. retail was still traumatized from 2018 to notice the demand side shifting
retail was traumatized but the onchain data was screaming accumulation. the number of wallets holding 1000+ btc grew every single week from september through december 2020
1000+ btc wallets growing weekly from sept to dec 2020. the accumulation was happening in plain sight and most people were looking the other way
chainalysis was ahead of everyone on the supply squeeze. their illiquid supply metric is still one of the most underrated onchain indicators
77% of BTC in illiquid wallets and only 3.4M available for trading. the squeeze was mathematical at that point. anyone who read the chainalysis report bought before 20k
Paul Tudor Jones and Square buying was the signal most people missed. everyone was comparing to 2017 instead of looking at who was actually accumulating
Paul Tudor Jones allocating to BTC was the moment pensions started paying attention. that one move did more for institutional adoption than any ETF filing
square put $50M into btc and everyone called it a stunt. they put another $170M in a few months later. the signal was clear if you were watching corporate treasury moves