What’s behind the crypto revival?

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As Bitcoin tests $5,000 and other crytpocurrencies rise in price, the big question everyone is asking is — what triggered this sudden reversal of fortune?

It appears from scanning the crypto press that there are a lot of theories bouncing around. One analyst, Tone Vay, suggests there is no particular trigger; it’s just normal speculation: “Shorts are liquidated, there were short squeezes, more people jumped onto the hype, and a lot of news media always look for a trigger to cause big drops and big rises. I would say more than half the time they are just trying to match news to something that it did not necessarily need news to happen.”

Bloomberg has another take on it. It wrote that it could be down to algorithmic trading. This is a method where automated software detects trends and determines when trades should be made. Bloomberg claims this has been on the rise for the last few months, and that the industry has seen 17 new algorithmic or quantitative funds launched since September, an amount that purportedly comprises 40% of crypto hedge funds started during this period. It also suggests that Bitcoins unexpected price surge on 2nd April “might have been provoked by a $100 million trade made on three major exchanges.”

And supporting this idea, Reuters reported that a 20,000 BTC order was spread across United States-based crypto exchanges Coinbase and Kraken, as well as Luxembourg’s Bitstamp. As a result of this trade, bots went into action pushing the prices and vtrading volume higher.

Others believe it is a “Brexit effect’, with investors offloading sterling for Bitcoin in case the UK crashes out of the EU next week without a deal.

Bloomberg also reported that in the two weeks prior to the market turnaround there was a sudden leap in the number of active digital wallets. It published details from market intelligence firm Flipside, which said: “According to Flipside Crypto, 40 to 50 percent of all Bitcoin had been held in digital wallets that were inactive from one to six months, while the average has reportedly been 10 percent since March 15. Eric Stone, co-founder and head of data science at Flipside Crypto, said, “there are more people warming up to the idea of buying Bitcoin.”

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