Newsflash: Bitcoin Leaps Over $200 to Surpass $4,100 for the First Time in Two Weeks

Bitcoin, the flagship cryptocurrency, has recently seen its price jump well over $200 in about 15 minutes to cross the $4,100 mark, something it hadn’t done since December 24, a day in which it saw its price dip from the $4,300 mark.

According to CryptoCompare data BTC is currently trading at $4,120 after seeing a $200 leap in a short amount of time, that helped it surge from the $3,880 mark in which it started the day. The leap has added billions to its market cap, as it’s currently up over 6.5% in the last 24-hour period.

Bitcoin has jump jumped over the $4,100 mark

What’s behind the flagship cryptocurrency’s sudden rise is, at press time, unclear. On social media various users have only so far started celebrating the move, and most suspect a whale has decided to stock up on BTC.

The surge comes shortly after legendary investor Gary Shilling revealed he’s staying away from BTC over its lack of “transparency,” and after it was revealed that nearly 80% of cryptocurrency investors are still net-invested in the flagship cryptocurrency.

It also notably comes during an ad campaign made by the Gemini Trust Company, a popular cryptocurrency exchange, that calls for cryptocurrency regulations and argues there needs to be a “bridge” between the traditional financial system and the cryptocurrency space. Notably Weiss Ratings has recently noted that bitcoin will “rise up and head for new all-time highs” as well.

Most top altcoins have seemingly followed BTC’s lead and are also on the move. The MVIS CryptoCompare Digital Assets 100 Index, a market cap-weighted index that tracks the top 100 cryptos, is currently up by over 5% in the last 24-hour period.

It may, however, be too early to celebrate. Some analysts on social media have already noted that BTC’s low liquidity may have helped the move be so dramatic, and at press time the price appears to be receding.

Speaking to CryptoGlobe this week Mati Greenspan, a senior market analyst at eToro, noted that if we do go back down again, the $3,000 mark represents a “critical support.” On Twitter, he noted that if BTC keeps moving up, it’ll face resistance at $5,000.

When asked whether he believes we’ll be moving up to test the $5,000 mark in the near future or whether the cryptocurrency is going to drop to $3,000 again, he noted that “we’ll see.” As to whether the pump was aided by low liquidity, he stated:

Bitcoin often spikes on low liquidity. What looks significant here is that the jump took us above the psychological barrier of $4,000, which Bitcoin has been testing since Christmas.

This week, litecoin (LTC) has also seen considerable gains. As covered, the cryptocurrency has been rising after hitting the 100 LTC node count on the Lightning Network (LN). At press time, it’s trading at $40 after rising 12% in the last 24-hour period.

This article has been updated to add Mati Greenspan's comments.

Chinese Yuan 'Inversely Correlated' with Bitcoin, Amidst US-China Trade Wars

Since January 2018, China and the US have been involved in an intense trade war in which both countries have significantly increased tariffs on imported goods and services.

Due partly to the rising tension between the two countries, the Chinese yuan (CNY) has been losing value against the USD. During the same time period, the price of bitcoin (BTC) and other major cryptoassets has been surging.

As noted by the South China Morning Post (SCMP), the value of BTC, the world’s most dominant cryptocurrency, increased by 26.5% to $7,878 during the time period from May 5 to May 17. Notably, US President Donald Trump had announced on May 5 that he would further increase tariffs on goods imported from mainland China.

Chinese Yuan Weakens as Nation’s Government Responds to Increased Tariffs

The SCMP pointed out that the yuan dropped to its lowest level since the past six months after the Chinese government responded to Trump administration’s decision to impose higher tariffs on China.

Commenting on the price fluctuations of both the yuan and bitcoin, Garrick Hileman, a Macroeconomics Researcher at London School of Economics (LSE) and Head of Research at Blockchain.com, remarked:

We are observing a strong inverse correlation between the [Renminbi] RMB’s value and bitcoin, meaning that recent RMB declines over trade tensions have been closely matched by increases in the value of bitcoin.

“Correlation Does Not Necessarily Equal Causation”

Hileman also mentioned that we “cannot be 100% certain” that the bitcoin price has been increasing due to heightened concerns regarding trade tensions and the corresponding decline in the value of the yuan. The blockchain researcher stated:

Trade tensions and declines in the RMB’s exchange rate as correlation does not necessarily equal causation.

Hileman, who earned his Phd from LSE, revealed:

This is not the first time we’ve seen significant increases in the value of bitcoin taking place alongside yuan concerns.

He added that there’s “growing recognition of bitcoin as ‘digital gold’ and it being used as a hedge against various macroeconomic risks.”

“This Year, the Narrative Is Bitcoin, Bitcoin, Bitcoin”

According to the SCMP, bitcoin’s price may have surged recently due to the generally positive remarks made about it at the Consensus 2019 conference.

Meltem Demirors, the Chief Strategy Officer at CoinShares, a crypto treasury management firm, has also confirmed recently that the narrative this year has been mostly about Bitcoin. Demirors revealed that both institutions and retail investors are “feeling good” and are “more confident” about the long-term potential of Bitcoin and the evolving ecosystem that supports it.