Bitcoin’s price has soared to its highest in almost five months, taking some altcoins with it. This could be the effect of a major order by an anonymous buyer spending $100 million on the most well known cryptocurrency.
According to a Reuters report, the massive order was spread across US-based exchanges Coinbase and Kraken and Luxembourg’s Bitstamp, said Oliver von Landsberg-Sadie, chief executive of BCB Group, a financial services group specializing in cryptocurrencies.
“There has been a single order that has been algorithmically-managed across these three venues, of around 20,000 BTC,” he said. “If you look at the volumes on each of those three exchanges, there were in-concert, synchronized, units of volume of around 7,000 BTC in an hour”.
“Usually Bitcoin is the leader of the market and altcoins tend to follow, as far as direction and sentiment is concerned,” said Mati Greenspan, an analyst at Israeli fintech social trading platform, eToro. “Today bitcoin is in the driving seat.”
Analysts are unable to point to any specific developments explaining the big order.
Michael Kazley, co-founder of investment firm Crescent Crypto Asset Management thinks there was a lack of a clear catalyst or news that drove the move. “Feels like a classic short squeeze, where the threat of higher prices drives short sellers to buy back and close their positions,” Kazley said.
Bitcoin Compares Favourably With PayPal And MasterCard
Research from DataLight, a data analytics platform, has shown that Bitcoin is now the major method used in cross border payments. They investigated Bitcoin as a payment system compared with the economic indicators of Visa, MasterCard and PayPal as provided in their 2018 annual reports.
They found that the total volume of transactions is comparable to that of MasterCard.
“Right now Bitcoin’s payment system is much superior to the conventional international payments and wire transfers,” the report states. “Technical improvement of Bitcoin’s network is almost certain to make it the world’s main payment system. This is why the bear trend of 2018 will be another dip before the exponential growth and new all time highs”.
The key factor that characterizes the state of a payment network is its activity, calculated based on the number of transactions. In 2018, an average Bitcoin transaction volume was much higher than Visa’s average, and the sum of $3.4 trillion transferred with Bitcoin in 2018 is 58 times higher than that of Paypal.
Bitcoin Will Surpass All Competition
Their research shows that in terms of total transaction volume, Bitcoin overtakes PayPal and nears MasterCard. After calculating the average sum of a transaction, they found that Bitcoin is “many thousands of times ahead of the competition in this aspect”. Adding that Bitcoin’s network is more “suitable for larger, probably international payments”.
Traditional payment systems have developed their companies over decades, developing gradually, unlike Bitcoin, which became available worldwide immediately. In just ten years, Bitcoin has managed to compete with the leaders of the payment system industry and its development is occurring exponentially.
“If it maintains this pace, in another 10 years, it will surpass all competition”.