OK perhaps that’s a little far-fetched. But what is behind crypto’s crazy climb over the past 18 months, we hear you ask? We don’t mean to suggest that the pandemic hasn’t been involved, because we think it has, but not in the way that this chart criminal implies — not, in other words, because it’s some kind of safe haven that traders flock to when they are worried about Covid cases rising; the data don’t bear that idea out.
The value of cryptocurrency is also driven by scarcity. This alludes to the cryptocurrency’s finite mechanism. The Bitcoin protocol sets the maximum amount of BTC that can be mined at 21 million. Therefore, as more people enter the crypto space, Bitcoin’s scarcity will inevitably increase, causing its price to increase. Some coins also use the burning mechanism to increase their value by destroying a portion of the supply.

This follows the launch of new Bitcoin futures Exchange-Traded Funds (ETFs) in the form of ProShares Bitcoin Strategy ETF, as well as similar moves from Valkyrie and Van Eck.
When Ethereum and Bitcoin crashed, these “discount plays” tanked. Now, as the mainstream plays begin to build momentum, these cryptos are struggling to get off the ground and make space for their own identities.