Bitcoin’s historic $3,000 candle on Friday brought forward the usual plethora of explanations, with individuals and the media alike searching for the reasons behind it. We have gathered the most popular reasons doing the rounds and have a look to see how much of a part, if any, they might have played in annihilating the bears.
Xi Jinping Publicly Pushes Blockchain Adoption in China
China’s president Xi Jinping announced on Friday that China should “seize the opportunity” to adopt blockchain, with the Bitcoin price performing its magic trick shortly afterwards, leading many to correlate one with the other:
— Valheru (@Geoffro82216142) October 26, 2019
Why did Bitcoin’s price jump this morning? Quite possibly because Chinese President Xi Jinping was quoted in state media calling blockchain a core technology and calling for speedier blockchain development and innovation. pic.twitter.com/3NriMOAB3F
— LongHash (@longhashdata) October 25, 2019
While this is a very tempting theory, it has several flaws. Firstly, Jinping cites blockchain technology, not Bitcoin, as what the country needed to focus on, and with the best will in the world, there is a huge difference between the two, particularly when it comes to China. China wants nothing to do with a decentralized currency like Bitcoin, which is evident in its past action in banning it. Secondly, China’s appreciation of blockchain technology is well known, and this is not the first time the country has called on the country’s technical boffins to harness its technology. China’s reaffirmation of its desire to push on with blockchain adoption is not related enough with Bitcoin to pump its price by $3,000, although it could have triggered a short squeeze (see below).
Every man and his dog were saying that BTC was on the verge of collapse, with millions of dollars on the line as a result from short sellers. Often this guarantees only one thing – the exact opposite will happen. Bitfinex had over 10,000 short positions by the time the pump came, up from 7,000 the day before, the highest amount for almost a month. As the price escalated, short sellers were forced to sell, driving it up even further. The Xi Jinping news could have been the catalyst for the initial pump, with the short sellers taking the reins and continuing the push.
It IS a motherfucking squeeze. A pump out of nowhere, out of context, without much sideways tends to be a short squeeze in hindsight. I don’t know how high whales will take this to though
— Anonymous J (@deliciouspodo) October 25, 2019
CME Futures Expiry
Bitcoin is known to do strange things on the day of the CME futures, which closed at 4pm GMT on Friday. Bitcoin started its move less than 30 minutes after the expiry of the futures, which was in danger of falling below its 200-day Moving Average for the first time until the huge move. This gave futures speculators half an hour to short Bitcoin for the next month before it mysteriously shot up $3,000.
Is Oct CME FUTURES of BITCOIN expiring today? If so, the recent selling might be over by now(?)
— david choi (@davidchoi5) October 25, 2019
Crypto Capital Indictments Might Get Exchanges Their Money Back
Crypto banking platform Crypto Capital, who rose to prominence in early 2018 when it saw $850 million of Bitfinex’s money seized as part of a money laundering investigation in Poland, has had its president arrested and its founder indicted by U.S. authorities. Some have since speculated that this is the first step for Bitfinex to go about getting that $850 million back (the loss of which the NYAG states they illegally backfilled with USDT tokens, hence the ongoing lawsuit). Good news, undoubtedly, but enough to kick BTC up by $3,000? No.
3 reasons why #Bitcoin surged today:
> CME Bitcoin futures expired today (4PM London time, last Friday of the month).
> President Xi Jinping supports blockchain in China.
> Crypto Capital CEO arrested. Exchanges, such as Bitfinex, may get some of the seized 850 million back.
— Gabor Gurbacs (@gaborgurbacs) October 25, 2019
Kanye West Releases a Jesus is King
— Mia Tam (@_blockandchain_) October 26, 2019
No One Knows
In short, as usual, no one knows quite why Bitcoin did what it did – it’s just what Bitcoin does, which is why we love it. Yes it’s probably manipulated to high Heaven, but can we not just go back to enjoying the ride rather than falling over ourselves trying to explain how the wheels go round?
So according to twitter, bitcoin is pumping because Kanye is going to start using blockchain and Xi Jinping just dropped an album all about Jesus.
— jj – Keyword: Crypto Podcast (@jj_byron) October 26, 2019