On Tuesday Bitcoin’s price jumped by 20 percent! That has not happened for a while now. But, Bitcoin isn’t the only gainer, other cryptocurrencies had some gains as well. However, the reasons for this anomaly is still unknown. Also, there is a lot of mistery behind the order like who the buyer is and what prompted him to invest that amount of money in the Bitcoin.
Bitcoin mistery order propels the 20% jump
Bitcoin 20% jump happened on Tuesday, which is the highest in five months! After a bitcoin mistery order by an anonymous buyer set of a craze of computer-driven trading, and as a result, pulled smaller cryptos up with bitcoin.
The first cryptocurrency to be made rose by 20% in Asian trading. For the first time since November, it broke the 5,000 dollar mark. Somewhere in the middle of the day bitcoin stabilized on around 4,800 dollars, which is still a 16% rise; the biggest gain in a day since April last year.
Biggest ascent Bitcoin had, was in 2017 when it made it to the 20,000 dollar mark. That was the peak of Bitcoin that was driven by retail investors. However, it collapsed last year.
Price growth was probably caused by an order that was worth about 100 million dollars. The order was spread across Coinbase, Kraken, and Bitstamp; and that single order was algorithmically-managed across these venues, and it was worth around 20,000 Bitcoin.
Although, the reason for the Bitcoin mistery order is unknown. There could be multiple reasons for the big order.
The investors haven’t invested in any cryptocurrencies for a while now. They had concerns over the security breaches and regulatory uncertainty. Thus, the price of Bitcoin had stayed steady, with trading around 3,300 and 4,200 dollars.
Also, Cboe Global Markets one of the first to offer U.S. bitcoin futures contracts in 2017, said last month that they would no longer provide bitcoin futures contracts.
Reasons behind Bitcoin 20% jump
There could be many reasons for Bitcoin 20% jump and the mistery order, so here are a few that might make sense.
Someone took the April Fool’s joke way too seriously
A great April Fool’s joke by a little-known news site called Finance Magnates might have been a reason of the Bitcoin 20% jump. In their article, they claimed that the SEC had approved two Bitcoin ETF’s. Then they go on to claim that the price of Bitcoin went up to 6,000 dollars. Well, they were almost correct, when the next day Bitcoin rose to 5,000 dollars. It looks like somebody took the article way too seriously.
However, we cannot say that the article was a huge part of the rise because it seems unlikely that it can influence somebody that much.
Bearish Trend maybe over?
The bearish trend for Bitcoin has been going on for a while now. The bears were strong throughout January, and it shed Bitcoin’s price by 7.59 percent in that month. However, highs and lows were almost the same in February, which could mean that the bearish trend is deflating. Bitcoin in February managed to break 4,100 dollars but at the end of the month went back to 3,600 dollars, and at the end of March went back above 4,100 dollars. These price movements were almost the same as when Bitcoin made a full breakout in 2015.
This theory cannot be the only reason for the Bitcoin 20% jump, but it means that maybe the gains that happened can be sustained.
Bitcoin getting new money
Since the U.S. Federal Reserve is continually printing more dollars, the value of the dollar will continue to go down against other assets, which that price of Bitcoin is going to go up against the dollar. Bitcoins strong first quarter in 2019 corresponds with a strong showing from stocks and bonds.
Also, upcoming IPOs will probably make a difference for Bitcoin, since it is expected that they will put additional funds into cryptocurrencies, and with Bitcoin being the main one, guess what will happen? Furthermore, Lyft IPO has already happened, and one of the gainers from Lyft’s IPO is Andreessen Horowitz. He is known as a significant investor in cryptos, but this doesn’t mean that he is the unknown person that helped the Bitcoin 20% jump, but he will maybe be the one in the future.
Smaller cryptocurrencies gained from Bitcoin 20% jump
After Bitcoin 20% jump, 6 million trades happened in less than an hour. It sent smaller cryptocurrencies like Ethereum and Ripple both rising by 10%. The value of smaller cryptos usually follows the Bitcoin.
What happens is that Bitcoin leads the way for smaller cryptocurrencies, as it did on Tuesday. So, smaller cryptocurrencies profited on Bitcoins 20% jump.
Also, if the bearish trend is over for cryptocurrencies, then all cryptocurrencies have something to look forward to.
Bitcoin 20% jump is quite a news in the crypto world, mainly because it came unexpectedly. After a rough time for cryptocurrencies, maybe there is some light at the end of the tunnel. But, the reasons behind the mistery of the big order will undoubtedly remain a secret, since we don’t know who the investor is and we probably won’t find out any time soon. Hopefully, this could spark a new cryptocurrency craze, so it probably wouldn’t be a bad idea to jump on board of this ride.