After nearly half a year of little variation in prices, Bitcoin has suddenly surged to US$5,000 on 2 April. This represents a 20% increase in a matter of hours. And the reason behind this price increase is a massive order for Bitcoin placed by a mystery investor.
What Happened on 2 April?
According to Reuters, an undisclosed investor placed an order of US$100 million across various exchanges in the US and one in Luxembourg. The news agency quotes Oliver von Landsberg-Sadie, the Chief Executive of BCB Group, a cryptocurrency company, who said:
There has been a single order that has been algorithmically-managed across these three venues, of around 20,000 BTC. If you look at the volumes on each of those three exchanges – there were in-concert, synchronized, units of volume of around 7,000 BTC in an hour.
So far, there is no clear explanation for this large order. Also, the investor who placed the order has remained anonymous.
The Aftermath of the Large Bitcoin Order
Of course, the market has settled a little after the initial surge of price. By the afternoon of the same day, the Bitcoin price had settled at US$4,800. Since then, analysts have been trying to explain this sudden move on the crypto market.
However, the massive single order triggered a significant increase in the trading activity for the day. Over 6 million transactions took place in just one hour – almost four times more than the daily average. Most of these transactions went through exchanges based in Asia.
Also, it is worth noting that the Bitcoin price surge influenced other cryptocurrencies, as well. Both ETH and XRP saw price increases of more than 10%. Analyst at eToro Israel, Mati Greenspan, explains the phenomenon:
Usually bitcoin is the leader of the market and altcoins tend to follow, as far as direction and sentiment is concerned. Today bitcoin is in the driving seat.
This is the second significant price increase for Bitcoin. In December 2017, the price of the cryptocurrency went as high as US$20,000, mainly influenced by retail investors. This did not last very long. In 2018, the Bitcoin prices dropped to one quarter of this all-time high value.
However, there seems to be a new price surge in the making after the market events on 2 April. After a slow price decrease over the last two days, at the time of writing, the Bitcoin price has once again crossed the US$5,000 threshold.
We will keep you informed of any further significant changes on the crypto market.