Bitcoin spiked to more than $7,500 on Sunday — a sharp rise from its $5,000 level at the start of May, and more than double its price in mid-December. Analysts have struggled to identify one single catalyst.
“With no major news factors behind the aggressive appreciation, the sharp $1000 jump over the weekend remains a mystery to investors,” wrote Lukman Otunuga, Research Analyst at FXTM, in a research note.
However, crypto-fans have weighed in with competing theories on its sudden rise, which run the gamut from compelling to wildly far-fetched.
Here are five reasons for the rise, according to Reddit users:
1. Safe haven
“It’s possible that a great number of rich people know that the traditional markets are effed eight ways to Tuesday,” wrote diydude2on the r/bitcoin thread’s daily discussion.
President Trump has sparked a global market sell-off after accusing China of walking back agreed provisions in a draft trade deal, hiking tariffs on $200 billion of Chinese goods, and preparing to expand tariffs to effectively all Chinese products in the next month if a trade agreement isn’t struck. Investors may have bought up Bitcoin to hedge their exposure to conventional assets.
2. Mainstream appeal
“Institutions are scrambling to get in ahead of the traditional brokerages’ launch (Fidelity, Ameritrade, Etrade) so they can dump on the next wave of retail investors to enter the space,” wrote Savage_X in the same discussion.
Fidelity, one of the world’s largest asset managers, will begin buying and selling bitcoin for its institutional customers in the next few weeks, according to Bloomberg. Online broker TD Ameritradeintroduced trading of bitcoin futures in December, while securities brokerage E*Trade is preparing to enable cryptocurrency trading on its platform, Bloomberg wrote.
Rival institutions could be buying up bitcoin with the expectation that the entry of major players into the market could bolster the cryptocurrency’s credibility and drive mainstream purchases, pushing up its price.
3. Exodus from alt coins
“The ICO experiment is over,” wrote gonzales82 in a thread about the Bitcoin spike, referring to the recent boom in cryptocurrency launches known as initial coin offerings.
“People are waking up to the realization that bitcoin is…
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