The Hindu Business Line
Bitcoin’s surge bumps up cryptocurrency market
An abrupt surge in Bitcoin sent the world’s most popular cryptocurrency to the highest level since November, jolting the $160-billion market for digital assets after three months of calm.
Traders struggled to pinpoint reasons for the rally, though some noted a flood of activity after Bitcoin breached the $4,200 level. The cryptocurrency briefly topped $5,000, and the value of digital assets tracked by CoinMarketCap.com jumped by about $17 billion in less than an hour.
Even after paring some of its gain, Bitcoin was trading up 16 per cent at $4,773.91 as of 6:38 am in New York. Rival coins Ether, XRP and Litecoin also jumped, as did cryptocurrency-linked stocks, including Remixpoint and CMC Markets.
Sudden swings in Bitcoin are nothing new, but price action in the virtual currency has been relatively subdued this year as investors weighed the prospects for mainstream adoption after last year’s 74 per cent crash. Market participants say big buy orders in Bitcoin can often lead to outsized moves, in part because volume is spread across dozens of venues. Trend-following individual investors and short covering can also exacerbate volatility.
“The Bitcoin market and crypto market in general continues to be small relative to the rest of the markets and emotional,” said Jehan Chu, managing partner at blockchain investment and advisory firm Kenetic Capital. “It is still very much subject to waves of enthusiasm. I don’t think today is anything special.”
George Harrap, the chief executive officer at Bitspark, said he is putting most things on pause until the market settles down. His contacts in the Bitcoin community have yet to identify a catalyst for the sudden jump.
The reason why? “Anybody’s guess at the moment,” said Harrap. Among potential triggers discussed on trading desks and in social media: short covering by traders who had stop-loss orders around the $4,200 level and an April Fools Day story on a littleknown online news site claiming that the US Securities and Exchange Commission had approved Bitcoin exchangetraded funds.