By Danny Scott, CEO of CoinCorner
Seeing a 20-30% increase to the Bitcoin price last Friday had people questioning why it ran so significantly – and quite honestly it’s hard to pinpoint one exact answer.
We’ve seen positive sentiment for Bitcoin slowly building throughout the year and we feel this has contributed to Bitcoin’s long-term price rise. However, the recent short-term, large increase may have also been influenced by a number of events over the last week.
It looks as though the biggest contributor could relate to China’s announcement that they’re creating their own stablecoin and investing heavily in blockchain. Following this, there has apparently been a large influx of searches for “Bitcoin” and “blockchain” on WeChat in China. The China news does at least correspond with the price movements, so this would make some logical sense. Additionally, there were other impactful news stories last week which may have also influenced and contributed to Friday’s movements.
Mark Zuckerburg was pulled in front of the US Congress to be questioned on his and Facebook’s involvement in Libra – their proposed cryptocurrency/stablecoin. Watching this, aside from some of Congress’s ridiculous questions (although I’m no fan of Zuckerburg, some of the questions were unbelievably uneducated and I imagine may have been based on personal agendas with no real interest in genuinely questioning on Libra), it only reinforced the power and credibility of Bitcoin, especially its decentralised nature which means it’s not controlled by an entity of any sort. When talking about Libra recently, Congressman Warren Davidson, was quoted as saying: “Whoever Satoshi Nakamoto is, you can’t serve Satoshi papers. There’s no headquarters to subpoena.”
Finally, news of the indictment of Crypto Capital Principal for fraud (which may have given Bitfinex a potential boost) and the highly anticipated Bakkt volumes that are now beginning to see increases, may have had some influence too.
Taking each of these angles into account, it’s possible that any or all of them had an impact on the price, but as I’ve always said, it’s very difficult to pinpoint one distinct reason when it comes to Bitcoin.