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Bitcoin's Recent Resurrection Could Be Connected to Algorithmic Trading; Reports


On April 2, bitcoin climbed suddenly to the peak value since November. All other major cryptocurrencies have faced a surge ending three months of calm in the $160 billion market and some seeing a major 24 hour growth.

The price of bitcoin hiked gaining more than 14 percent in the market on Tuesday. The cryptocurrency peaked at $4,849 according to CoinMarketFeed stats, before dropping slightly.

The media giant Bloomberg reports suggest that the recent crypto market jump could be linked to algorithmic trading. Algorithmic trading is a method that utilizes automated software to analyze trends and determine when trades should be made. According to the reports from Bloomberg the automated software has been on the rise in the last couple of months.

Reports from Bloomberg states that Bitcoin’s [BTC] unexpected 20 percent rise in price on Tuesday, April 2 was right after the Asian markets opened. This might have been evoked by a $100 million trade made on three major exchanges.

Since September 2018 the crypto-space has seen 17 new algo or quantitative funds that allegedly comprise 40 percent of crypto hedge funds started during this period. In addition due to the 2018 bear market, crypto funds alone lost around 72 percent. The algo funds reported on gains of between 3 percent and 10 percent per month during the crypto winter.

Based on the reports, experts told Reuters, a 20,000 BTC order approximately $100 million at press time was held across U.S. based cryptocurrency exchanges Coinbase, Kraken and Luxembourg’s Bitstamp. The market might be triggered by massive order and the bots could then start trading, compelling the prices and volumes to hike.

The entrepreneurs in the crypto-space think that algo trading will have a positive effect on the crypto industry. CFO of crypto exchange Binance, Wei Zhou shared that the algo trading going to be the rock stars of the crypt-space. Whereas some of them are scared of the market manipulation triggered by the algo trading and some of them could use fake orders to mislead other traders.

Bloomberg has released a series of articles highlighting the possible causes behind the notable market surging. For instance, Bloomberg author Eric Lam claims that the reason behind the price surge of bitcoin and crypto market might be because of U.S. Securities and Exchange Commission approving a bitcoin ETF.