Bitcoin holders have been enjoying the significant growth of the main cryptocurrency lately, and most of them hope this surge continues. Some say it is a complete surprise that has no lucid explanation, while others claim this mooning of the token could be easily predicted. If you ask me, I have to admit, I did not see it coming, but now, when analyzing everything that’s happened over the past few weeks, I see the current Bitcoin upturn stems from several reasons. Let’s talk about them in further detail.
Are Whales In a Game?
First of all, I cannot help but mention a huge Bitcoin buy in early April 2019. Some BTC whale emerged from the deep and triggered the crypto to rise 20% at once. He or she has made three purchases through three different exchanges — Kraken, Coinbase, and Bitstamp — for 7,000 BTC each. The total value of these deals was around 100 million dollars. And that was only the beginning. Institutional buyers have been very active since then, increasing the demand and, hence, the price of bitcoins. I have some big concerns about it, though, as we do not know who these whales are, or what their real intentions are.
Yes, the price is growing since it was sparked by the sudden sellers' market, but what if this is only a manipulation? So far, 2019 has been a year of Bitcoin accumulation, as people are holding lots of BTC and waiting for a better time to trade it. Big whales may want to increase liquidity now, using their capital in order to push the charts up, having in mind a further “short squeeze”.This means that when the price goes high enough, they will close short positions, which can cause the market to collapse. Thus, the unknown whales will be able to buy bitcoins cheap, while everyone is panic selling.
Fidelity Investments
Another reason for the pumping price of Bitcoin can be the declaration of the leading asset manager Fidelity Investments, Inc. In the beginning of May, the company has announced that it will start trading BTC on behalf of major investors. According to Bloomberg, the spokeswoman of Fidelity, Arlene Roberts, wrote that the company had a set of clients they support, and the plans were to focus on offering Bitcoin.
Obviously, this news had a huge impact on the BTC charts, making the price soar. Some experts even say that it was a key factor of the current BTC furthering, along with such news as the oncoming testing of Bitcoin futures by Bakkt, and others. Institutional investors may feel more secure knowing that their capitals will be backed by such reputed companies, so this is why their interest in the cryptocurrency grows.
Bad News Isn't The Problem
One thing that surprised me earlier this year was that really bad crypto-related news did not drop the charts. On the contrary, digital assets kept on surging despite all the frightening reviews and predictions. First of all, I am talking about the Binance exchange. You surely remember what happened in the past after the significant security breaches of the major crypto exchanges. Well, on the 7th of May, we read on the news about Binance hacked for 7000 bitcoins. But there was no panic liquidation, no price decline, and instead, Bitcoin firmly held its positions of $5,700 per BTC.
Another thing, which dropped the market steeply in the past was bad news from legislators or law enforcement officials. However, a couple of weeks ago, the General’s office of the New York Attorney conducted an investigation after it appeared that Bitfinex did not have enough reserves to back 100% of the USDT they trade. This Bitfinex-Tether fiasco could have caused a huge slump, but again —nothing happened. I can make a conclusion that the bad news does not have the influence it had before.
Bitcoin Domination
Bitcoin price can be stimulated by its dominance rate, which is higher than ever since its remarkable all-time ceiling back in 2017. 58% of all cryptocurrencies’ market capitalization belonged to Bitcoin on May 10. A month later, it is still more than half. This means that major investors move their funds from altcoins to Bitcoin which increases the demand for the main crypto and pushes its price upwards. It does not mean, though, that altcoins are going to leave the stage.Well, here you have the main reasons for the recent Bitcoin surge, in my opinion. I cannot name the most important one, and I do not say that there were no other factors which influenced the BTC charts.
Remember that investing is a risky business. No expert can predict with a 100% guarantee what will happen next. Be very careful and always make your own well-considered decisions. This BTC growth is not unprecedented; we’ve seen such things before, and lots of investors made bad moves, and lost fortunes. Do not repeat their mistakes.