Bitcoin, the first and biggest cryptocurrency, suddenly shook off months of little activity today with a 14% surge that took its value back above $5000 for the first time since last November. There is not yet any obvious catalyst for the leap in value but it has again sparked interest in Bitcoin following months of uncharacteristic calm in cryptocurrency markets.
Bitcoin spent 2018 sliding from the $20,000 peak hit at the end of the 2017 cryptocurrency bubble but steadfastly refused to give up all of those gains despite a 74% drop and many commentators calling the end of the market. The original cryptocurrency bottomed out in mid-December at around $3200, compared to $1000 at the beginning of 2017.
After recovering to around $4000, the first three months of 2019 were ones of remarkably low volatility until earlier today when a sudden surge took Bitcoin’s price back to $5000 on some exchanges. Coinmarketcap.com, the cryptocurrency market data service that collates prices across major exchanges puts the average at around $4800 approaching midday.
The surge took place over less than an hour and dragged the rest of the wider cryptocurrency market up with Bitcoin. The total market capitalisation of all of the cryptocurrencies tracked by Coinmarketcap.com added a whopping $17 billion in less than sixty minutes.
Volatility has always been a feature of the market for Bitcoin and other cryptocurrencies but not over the first quarter of 2019. However, Bitcoin is still a small market in comparison to mainstream financial markets. That means big buy, sell or short moves can quickly lead to spikes or crashes, suggesting someone(s) somewhere bought a lot of Bitcoin this morning. That raises the question who and why?
One theory is an April Fool’s Day story stating the SEC had approved a Bitcoin ETF. Several have been rejected over the past several months. But that, if bought by enough people, would have been expected to see the price rise over several hours rather than spike so suddenly. Unless one particularly wealthy individual was suckered in and bought a huge volume of Bitcoin.
Jokes aside, there is still hope that a Bitcoin ETF will finally be approved by the SEC at some point over the next couple of years, though it doesn’t appear likely in the immediate future. The cryptocurrency, or another more technologically advanced alternative that doesn’t yet exist, might still have a major future in one form or another.
NYSE-owner Intercontinental Exchange, one of the biggest securities exchange companies in the world, is planning a regulated Bitcoin exchange called Bakkt. It is planned for Baakt to offer one-day physically-settled Bitcoin futures contracts in a move that would potentially open the door to institutional investors and bring cryptocurrencies into the mainstream. While the launch has been repeatedly delayed due to regulatory hurdles, those investing online in Bitcoin are hopeful, if and when Bakkt finally happens, it will mark the beginning of a more mature, stable market for the cryptocurrency.