The price of bitcoin has been in a bullish mode for the past seven days. The price of the world’s largest cryptocurrency by valuation climbed to a seventeen month high hitting $12,935.58 on the Bitstamp exchange.
It is a 90-degree rally with a ratio of bitcoin’s price to the 200-day price average printed at a high of 2.42, a level which was last seen in early January 2018, according to Coindesk.com.
In Nigeria where growing investors’ interest in the cryptocurrency has contributed to the country taking the top position on Google Trends Worldwide search on Wednesday, Bitcoin on Luno exchange was selling for N4,715,299 on Wednesday evening.
Marius Reitz, general manager, Luno Africa, in a statement explained that the upward price is in line with the longer-term interest in the asset.
“As a result of the price fluctuations, though, there is more interest,” he said. “We are seeing new people buying cryptocurrency on our exchange every single day.”
Six factors have been identified as being behind the recent surge.
Facebook Libra
Many analysts are very optimistic about the potential of Libra to help cryptocurrencies gain mainstream acceptance, both as a means of payment and as a store of value. Reitz says it mitigates volatility with a more balanced and smart issuing mechanism which is ultimately more stable and it instils broader acceptance – should Facebook add Libra to all Facebook products, it will instantly bring billions of people closer to the crypto realm.
Speculation
Many investors want to take advantage of rising prices and make money. Hence, there has been a lot of pent-up interest and capital from both consumers and institutional investors who want to make sure they do not miss the next wave as the asset class appreciates in line with its long-term upward trend.
April Spike
The activities of a large buyer or group of buyers which saw a substantial amount invested in the market and possibly kicked off a buy trigger could also be behind the surge. That investment is believed to have encourage investors who prior to then was sitting on the fence to take their position.
China vs USA
The ongoing trade war between world superpowers, the United States of America and China has contributed its fair share to the new positive market sentiments. As the trade war progress, investors are forced to seek alternative assets or safe-haven to put their money.
Increased institutional investments
A growing number of institutional investors have publicly expressed plans to participate in the cryptocurrency market. One of them is the Fidelity Investment announcement that is building a crypto solution for institutional investors (institutional money may come from pension or hedge funds.
Reitz says Fidelity’s infrastructure could facilitate millions and even billions of dollars of investment into the market.
“In addition, the owners of the New York Stock Exchange, ICE, have also indicated that they would launch a crypto trading platform called Bakkt for institutional investors. Luno however, does not believe that we will see mass institutional adoption in 2019,” Reitz said.
Bullish signals
“There have also been a number of bullish signals over the last few months, including large banks and tech companies moving into the sector, positive news on Bitcoin’s scaling capacity and a host of new instruments like stablecoins with much better-defined use cases, much of which one needs to access via existing crypto onramps,” Reitz said.
