Earlier this week, Bitcoin prices surged 20%, bringing up the price of smaller cryptocurrencies with it in a move that harkened back to the crypto glory days of 2017.
The bump began with a single, massive, coordinated order of $100m worth of ’Coin. Analysts know that the huge order was placed across 3 exchanges and algorithmically managed… but no one knows who did it.
Bitcoin’s big buyer
“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,” Oliver von Landsberg-Sadie, a cryptocurrency executive, told Reuters.
In just an hour, there were more than 6m trades — between 3x and 4x as many trades as normal.
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The massive purchase drove the price of Bitcoin up past $5k for the first time since November — a big win for a currency that was declared dead at least 90 times last year, but still a far cry from the currency’s high of $20k.
Why does this ‘mystery trader’ have so much influence?
Crypto markets are “thinner” than normal markets (i.e. they have fewer traders), which means each individual trade is more likely to trigger other trades, most of which occur algorithmically.
Plus, since Bitcoin is still an anchor point in a market full of alt-coins, big Bitcoin buys have an outsized impact. In response to this particular Bitcoin swing, Ethereum and Ripple (the 2nd and 3rd largest cryptocurrencies by market share) also jumped by more than 10%.