Bitcoin Explodes Above $13,000 For First Since Jan 2018 And Everyone Wants To Know Why

Profile picture for user Tyler Durden

Update (1225ET): Bitcoin has just crossed above $13,000 for the first time since January 2018, soaring over $3,000 in the last 3 days.

Continuing to track 2017’s trajectory…

*  *  *

After breaching $10K over the weekend for the first time since March 2018, bitcoin has accelerated its sharp move higher and, trading close to $13,000 on Wednesday, up almost 20% in the past 24 hours. It is now up 240% since the start of the year, and even though it remains below its all-time high of nearly $20,000, at the current pace, it will surpass its all time high in just a few days.

The last time Bitcoin rose above $12,000 was in December 2017, when it continued to rally, on some days moving several thousand dollars inhours, eventually reaching its all time high as $19,511 just before Christmas 2017. That surge, however, was followed by a calamitous drop as retail investors fled, with the crypto dropping below $6,000 by February, and hitting $3000 just months later. All in all, in December 2017 and January 2018, Bitcoin spent about six weeks above $12,000.

Will this time be different, is the main question asked by traders. And as usual, the second biggest question posed by traders, investors, speculators and plain old haters is what is the reason behind the move.

According to some, Facebook’s announcement this month has revived interest in coins, while investors seeking safety have also pushed up Bitcoin’s price.

“It obviously does appear to be benefiting from some sort of flows that gold is benefiting, too,” CMC Markets chief strategist Michael Hewson said. “You’ve got all this stuff about Libra going on, which is renewing interest in bitcoin. Crypto is back in vogue.”

That part was right; what he said next, however, was not – he added that the investors buying bitcoin were speculative. That is precisely the opposite of what JPM found last weekend when the bank concluded that the current bout of buying is not retail – as was the case for much of 2017 – but institutional.

Meanwhile, as bulls cheer signs that the next bubble in cryptos is well and truly here, sparked by interest in virtual currencies from major companies like Facebook and JPMorgan, skeptics say it’s unclear how those initiatives will ultimately benefit Bitcoin and its peers.

It is also unclear if Facebook’s Libra “crypto” experiment has anything to do with the recent move. To be sure, it’s not news as it was well known months in advance that Facebook was launching its “crypto” product, which as explained here before, is not even crypto. Instead what appears to be causing the rush into bitcoin, ethereum and other cryptos is global monetary policy (and Chinese capital flight).

Meanwhile, not everyone agrees with JPM that institutions are now long bitcoin: according to the WSJ citing the latest CFTC Commitment of Traders report, hedge funds and other money managers held about 14% more bearish “short” positions in CME bitcoin futures last week than they did bullish “long” positions,

Other large traders were even more bearish. “Other reportables”—a loose category of firms that don’t necessarily manage money for outside investors—held more than three times as many short positions in bitcoin futures as long ones, the CFTC report shows.

The WSJ concludes that it is mostly small, retail investors who are taking the other side of the trade, in clear disagreement with JPM’s conclusion. Among traders with fewer than 25 bitcoin contracts, a category that likely captures many individuals placing bets in bitcoin, long wagers outnumbered short bets by 4 to 1.

“Traditional market participants may be more skeptical of [bitcoin] than millennial day traders,” said George Michalopoulos, a portfolio manager with Chicago fund manager Typhon Capital Management LLC, although he stressed that his views were speculative and that it is hard to know what is driving the CFTC’s numbers.

Of course, if the WSJ is right, it would suggest that a big reason for the bitcoin surge higher is an institutional short squeeze as retail investors are once again proven right.

Finally, for an extended attempt to explain the recent surge in bitcoin, here is a tweet storm from CoinShares Chairman Danny Masters who lays out his, in our opinion, far more accurate take of what is behind the latest bubble in bitcoin.

Finally, for those wondering where bitcoin may end up before the current bubble pops, here is the infamous bitcoin “log”chart which see the current hitting $60,000 some time soon.

Click above logo for original post

 

••••

The Liberty Beacon Project is now expanding at a near exponential rate, and for this we are grateful and excited! But we must also be practical. For 7 years we have not asked for any donations, and have built this project with our own funds as we grew. We are now experiencing ever increasing growing pains due to the large number of websites and projects we represent. So we have just installed donation buttons on our websites and ask that you consider this when you visit them. Nothing is too small. We thank you for all your support and your considerations … (TLB)

••••

Comment Policy: As a privately owned web site, we reserve the right to remove comments that contain spam, advertising, vulgarity, threats of violence, racism, or personal/abusive attacks on other users. This also applies to trolling, the use of more than one alias, or just intentional mischief. Enforcement of this policy is at the discretion of this websites administrators. Repeat offenders may be blocked or permanently banned without prior warning.

••••

Disclaimer: TLB websites contain copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available to our readers under the provisions of “fair use” in an effort to advance a better understanding of political, health, economic and social issues. The material on this site is distributed without profit to those who have expressed a prior interest in receiving it for research and educational purposes. If you wish to use copyrighted material for purposes other than “fair use” you must request permission from the copyright owner.

••••

Disclaimer: The information and opinions shared are for informational purposes only including, but not limited to, text, graphics, images and other material are not intended as medical advice or instruction. Nothing mentioned is intended to be a substitute for professional medical advice, diagnosis or treatment.

••••

Click on the image below to visit TLB Project on twitter …