- Bitcoin soared to more than $ 7,500 on Sunday, more than double its price in mid-December.
- The cryptocurrency enthusiasts in Reddit proposed several theories for the sudden rally.
- They highlighted the trade war between the United States and China, the institutional interest, the exodus of alternative currencies, the Bitfinex scandal and Binance's hacking as possible motives.
- See the Bitcoin trade live.
Bitcoin soared to more than $ 7,500 on Sunday, a sharp increase from its $ 5,000 level in early May and more than double its price in mid-December. Analysts have struggled to identify a single catalyst.
"Without major news factors behind the aggressive appreciation, the $ 1000 strong jump over the weekend remains a mystery to investors," wrote Lukman Otunuga, FXTM research badyst, in a research note.
However, the crypto-fans have joined the competing theories for its sudden increase, which ranges from compelling to wildly outlandish.
Here are five reasons for the increase, according to Reddit users:
1. safe refuge
"It is possible that a large number of rich people know that traditional markets have been eliminated eight times until Tuesday," wrote diydude2 in the daily discussion of the r / bitcoin thread.
President Trump has caused a mbadive sale in the world market after accusing China of delaying the provisions agreed in a draft trade agreement, raising tariffs to 200,000 million dollars in Chinese products and preparing to expand tariffs on all products Chinese in the next month The agreement has not been reached. Investors may have bought Bitcoin to cover their exposure to conventional badets.
2. General appeal
"The institutions are rushing to get ahead of the launch of the traditional brokers (Fidelity, Ameritrade, Etrade) so that they can turn to the next wave of retail investors to enter the space," Savage_X wrote in the same discussion.
Fidelity, one of the world's largest badet managers, will start buying and selling bitcoins for its institutional clients in the coming weeks, according to Bloomberg. Bloomberg wrote that the online broker TD Ameritrade introduced bitcoin futures trading in December, while the E * Trade stock broker is preparing to enable cryptocurrency trading on its platform.
The rival institutions could be buying bitcoins with the expectation that the entry of the main players in the market could strengthen the credibility of the cryptocurrency and boost the main purchases, raising its price.
3. Exodus of the coins alt.
"The ICO experiment is over," wrote gonzales82 in a thread about Bitcoin's peak, referring to the recent boom in cryptocurrency releases known as initial coin offers.
"People are realizing that Bitcoin is a much bigger idea than any of the blockchain phantasmagoria that people have been trying to push for the past two years."
There is evidence to support the idea that investors are shifting funds from other cryptocurrencies to Bitcoin.
"From the simple observation of the data, one factor that could be behind at least the increase in BTC is the conversion of currencies" in bitcoins ", said Sid Shekhar, co-founder of Token Analyst, in a interview with Business Insider. "For example, we have always been seeing much more BTC transferred out of the exchanges than entering."
4. The Bitfinex scandal drove the Bitcoin purchases
The Bitcoin rally could also be a product of the Bitfinex scandal. New York Attorney General Letitia James recently filed a lawsuit accusing the owner of the Bitfinex exchange of "ongoing fraud" and depleting at least $ 700 million of the reserves that support its digital currency, Tether, to cover up to $ 850 million in missing funds.
"I think Bitcoin is going up because [of] the whole Bitfinex thing is happening … I think they're having a lot of problems [fulfilling] withdrawal requests, "Sanderson22 wrote.
"I think a lot of people are buying Bitcoin [and] coming out of Tether, I think there will be a fall if the Bitfinex house of cards collapses[s] and they ended up losing a lot of people's money. "
Other commentators expressed similar opinions.
"It seems to me that as soon as the Tether / Bitfinex scandal started to come out, the price went up," Swt wrote. "Could not it be from people who had a lot of money stored in Tether? [deciding] It could be safer to move from Tether to Bitcoin. "
A crazy theory suggests that the owners of Bitfinex are raising the Bitcoin price to replenish the cash reserves of the exchange.
"Bitfinex is launching everything they have to generate a new pump to attract any USD $ influx they can get from FOMO butters because otherwise they are completely insolvent for cash," Poop_Shame wrote.
5. Binance's hack demonstrated the integrity of Bitcoin.
After hackers stole $ 40 million of Bitcoin from Binance last week, the CEO of the coin exchange, Changpeng Zhao, proposed a reversal of the block chain to reverse illicit transactions and recover the funds. The fierce reaction to his suggestion may have reinforced the image of Bitcoin as a legitimate currency and fuel the demand for it.
"I think [Binance] It could have helped Bitcoin a lot with his suggestion to roll back the chain, "wrote 2btc20000pizzas." The community quickly closed that idea (users, developers and miners) in a single day. "
The claims of Bitcoin's advocates that the cryptocurrency is "resistant to censorship" and "scant" became "more tangible when the notion of manipulating the blockchain was closed in a matter of hours," the commentator added. "I really think for a lot of people, [this] I could have alone [shone] a light on why Bitcoin more than any other altcoin has value, and it's not just stupid Internet money. "
Bitcoin rose 5% to $ 7,048 at the time of writing this article.