After a 74 percent drop in 2018, Bitcoin has showed relatively little activity this year – but its sudden rise causes other crypto-assets to jump
The Bitcoin cryptocurrency showed an abrupt surge in value on Tuesday after months of calm, rising up to 20 percent in Asian markets to higher than $5,000 (£3,833) for the first time since mid-November, with market watchers offering varied explanations for the shift.
Traders have shown little interest in Bitcoin so far this year, following a 74 percent crash last year that came amidst fears of a regulatory clampdown.
The sudden rise pushed the digital assets tracked by CoinMarketCap.com up by about $17 billion in less than an hour, and even after losing some of its value, Bitcoin was still trading up by 16 percent at around $4,700 by the early afternoon in Europe.
Other cryptocurrencies including Ether, XRP and Litecoin also rose, as did cryptocurrency-linked shares, as investors followed Bitcoin’s lead.
One cryptocurrency executive said the surge appeared to have been triggered by a massive order worth about $100 million spread across three major exchanges.
Oliver von Landsberg-Sadie, chief executive of London-based cryptocurrency firm BCB Group, said an algorithmically managed order of about 20,000 Bitcoin had been placed across the Coinbase, Kraken and Bitstamp exchanges, Reuters reported.
“If you look at the volumes on each of those three exchanges, there were in-concert, synchronised, units of volume of around 7,000 BTC in an hour,” he said.
But others in the industry said they had yet to identify a particular cause behind the surge.
“The reason why? Anybody’s guess at the moment,” George Harrap, chief executive of Bitspark, told Bloomberg.
Last year’s Bitcoin slump followed an extraordinary boom in 2017 that saw the asset surge more than 1,400 percent to finish at almost $20,000 near the end of the year – only to begin a precipitous slide only a few days later.
Cryptocurrencies’ extreme volatility is one reason why governments have considered bringing in stricter regulations.