Experts Speculate on Reason for Bitcoin BumpScroll Down
On April 2, Tone Vays, who is a well known Bitcoin analyst, commented about the recent surge in digital currency prices in an interview. He said that the surge may not have had a particular catalyst. He further indicated that is quite possible that cryptocurrency prices could fall again.
Vays says that, when an asset rises considerably in price, the event is not always associated with some fundamental rationale. He says that sometimes surges in price are simply the effect of rampant speculation, and that this is what could be happening right now with Bitcoin.
Vays went on to say that he had long expected Bitcoin to rise above $5,000 mark once it passed the $4,200 level. What he did not expect was for Bitcoin to rise above $4,000 at this point in time.
He further mentioned how short sales might have played a role in the rise. He indicated that many such sales were liquidated and that this may have led many investors to jump into the market. He also criticized the media, who he says are always trying to match market surges to news stories when in reality surges often happen independently of them.
Other people have their own theories to explain Bitcoin's sudden and meteoric rise. A few analysts believe that the rise is related to Brexit. They think that some investors are converting British pounds they hold into Bitcoin ahead of the United Kingdom's scheduled departure from the European Union later this month. Other analysts have attributed the sudden rise to program trading, which is also known as algorithmic trading.
Still other industry experts are associating Bitcoin's rise with a recent increase in the number of Bitcoin wallets. According to analysis from a market intelligence company called Flipside Crypto, a high number of wallets became active with two weeks of the surge. The company also maintains that, while normally close to half of all Bitcoins sit in inactive wallets, since March 15 only 10% of Bitcoins have been sitting in inactive wallets.
Eric Stone, who is a co-founder of Flipside Crypto, calls this good news for cryptocurrency optimists.