Yesterday, the entire cryptocurrency market was amazed by the Bitcoin bull run that took the price of BTC above $5,000 and allowed the cryptocurrency market to gain over $18 billion in market capitalization. Bitcoin went from the low $4000 level to as high as $5080 within less than an hour. The industry has been predicting a Bitcoin bull run for a while now but no one expected it to happen yesterday. At the time of writing, the bulls were still in full control of the market and many people where trying to find out why the price of Bitcoin is rising. Well, some experts have weighed in on the possible causes of the Bitcoin bull run.
Bitcoin Bull Run: Bitcoin Futures, Whale Transaction And Bitcoin Halving Caused The Bitcoin Bull Run
The upcoming Bitcoin halving event is one catalyst that was predicted to cause a Bitcoin bull run. However, the price of Bitcoin was expected to increase progressively and not rapidly. So, the sudden spike can’t be fully credited to the Bitcoin halving. This is why following the surge in the price of Bitcoin yesterday, one cryptocurrency strategist said that the Bitcoin futures contract is responsible for the rise in the price of Bitcoin. According to Gabor Gurbacs, one of the digital assets strategist at VanEck, Bitcoin futures trading volume on Cboe and CME spiked by 16%. He said;
“CME Bitcoin futures expired last Friday. A large chunk of positions were rolled (buying) into the new front month BTC futures contract. Over the weekend, heavy spot Bitcoin and over-the-counter buying followed the Bitcoin futures contract expiration pushing BTC price up slowly and gradually. As the price moved up in increments, over $500 million shorts have been liquidated on leveraged crypto derivatives trading platforms around the world.”
Meanwhile, Oliver von Landsberg-Sadie, the CEO of BCB cryptocurrency firm, said that the Bitcoin bull run was ignited by a single Bitcoin whale in three transactions. Speaking to Reuters, Landsberg-Sadie said that a Bitcoin whale bought Bitcoin worth $100 million. The three transactions were coordinated through three different exchanges; Kraken, Coinbase and Bitstamp at the same time. In his words;
“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.”
Bitcoin Bull Run: How Long Will The Bitcoin Bull Run Last?
The cryptocurrency market is anything but predictable. So, stating the exact duration of the Bitcoin bull run may be difficult. However, one thing is certain; the bulls have taken control of the market. A cryptocurrency analyst, DataDash, said that the price of Bitcoin will eventually receive another pump from OTC traders. In his words;
“We have to understand that over the past months, we’ve had a good opportunity for OTC buyers to finally start picking up Bitcoin at these [lower] levels. And once they have enough incentive, once they have enough at stake in Bitcoin markets, once they’ve built up their long term positions, they have an incentive to trade on spot market. Meaning, to clear through the order book to start buying positions on spot market. Why would they do that? Well, it’s because they’ve got a much more substantial position that they bought OTC where they didn’t incur slippage. And now they have an incentive for price to actually have slippage to the upside, to clear through that order book, to buy some extra Bitcoin on an exchange, really across most of the major exchanges, probably around 50,000 or 60,000 Bitcoin, and from there actually increasing the value of their much larger position. And this can happen in crypto markets, whether people think it’s moral or not. I think that’s substantially what’s happening.”
What do you think about the Bitcoin bull run? Was it caused by the Bitcoin halving, Whale transactions, Bitcoin futures, or FOMO? Feel free to share your comments below.
Max writes about blockchain projects and regulation with a special focus on United States and China. He joined Smarterum after years of writing for various media outlets.
