LONDON (Reuters) – Bitcoin burst at its highest level for nearly five months on Tuesday, and sent up smaller cryptographic baskets with analysts attributing the move to a large order by an anonymous buyer who triggered a crazy computer-driven deal.
FILE PHOTO: Bitcoin.com buttons are seen on the floor of the Consensus 2018 blockchain technology conference in New York, New York, USA, May 16, 2018. REUTERS / Mike Segar / File Photo
The original and largest crypto competition rose as much as 20 percent in Asian trade, exceeding $ 5,000 for the first time since mid-November. By late morning, it had set itself at around $ 4,700, still up 15 percent in its biggest one-time gain since last April.
Bitcoin rose to nearly $ 20,000 by the end of 2017, the top of a bubble driven by retail investors, pushing crypto baskets on the agenda of regular financial companies. But great interest fell as prices collapsed, and now trading is primarily handled by smaller hedge funds, tech firms and wealthy individuals.
Oliver von Landsberg-Sadie, chief executive of London-based cryptocurrency firm BCB Group, said the move was likely triggered by an algorithmic order of about $ 100 million spread across major exchanges – US-based Coinbase and Kraken and Luxembourg based bitstamp.
"There has been a single order that has been algorithmically controlled across these three venues, at about 20,000 BTC," he said.
"If you look at the volumes on each of these three exchanges – there was in concert, synchronized, volume of about 7,000 BTC in an hour".
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Analysts couldn't point to any specific news or developments in the crypto industry that could explain the mystery buyer & # 39; s big order.
Developed price movements of the kind rarely seen in traditional markets are common in cryptographic markets where liquidity is thin and prices are very opaque.
So large-scale orders tend to spark the purchase of algorithmic dealers, says Charlie Hayter, founder of the industry's website CryptoCompare.
As bitcoin rose, there were 6 million trades over an hour, Hayter said – three to four times the usual amount of orders concentrated on Asian-based exchanges.
"You trigger other order books to play catch up, and it creates a buyer frenzy."
Bitcoin's surge sent smaller cryptographic courses, known as "altcoins", trading higher. Ethereum's ether and Ripple's XRP, respectively, the second largest and third largest coins, both jumped by more than 10 percent.
Price movements of small coins tend to be correlated with bitcoin, which still accounts for well over half of the value of the crypto rival market.
"Usually bitcoin is the market leader and the altars tend to follow in terms of direction and mood," says Mati Greenspan, an analyst at eToro in Israel. "Today bitcoin is in the wheelchair."
Cryptocurrency markets have been relatively quiet so far this year, with bitcoin trading so far between approx. $ 3,300 and $ 4,200.
There have been few catalysts for large price movements of the kind seen last year. In 2018, fear of regulatory campaigns and declining interest rates from retail investors saw bitcoin fall by about three quarters.
Reporting by Tom Wilson and Tommy Reggiori Wilkes; Editing Abhinav Ramnarayan and Andrew Cawthorne