Bitcoin (BTC): Who? What? Why? How? Where!

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Bitcoin - Bitcoin (BTC): Who? What? Why? How? Where!

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On the morning of April 12, a few minutes before 6 AM EDT, a flurry of buyers hit Bitcoin (BTC), taking the price of the crypto-currency up from $6,841 to $7,759 within two hours.

American buyers grabbed the move and ran with it. Before New York hit its pillows that night, prices were over $7,900, and by the next morning the price was $8,103.

There were similar moves in other cryptocurrencies. Ethereum rose nearly $100, to $518 per coin. Ripple jumped 19% in 24 hours. The total market cap of cryptocurrencies rose to $325 billion.

Cryptobulls were thrilled. “The bulls are back!” wrote Charles Bovaird. 

Yes, but which buyers, and where? That’s the question that was probably dawning on traders as April 13 opened.

Where Is the Question?

There has been another big move in the currency markets, coinciding with cryptocurrency’s rise.

The Russian Ruble has been falling. Having been steady at around .17 of a cent for a year, the price began cratering late on April 8, bottoming at .15 of a cent, a move of 20%, before retracing half the move to trade at about .16 of a cent on April 12.  This was mirrored in the action of the Russian stock market, a collapse of 50%, then a recovery.

If cryptocurrency has any use at all, it’s as a hedge against the action of “fiat” currencies, those controlled by national banks, like the Ruble. It is wise to check for news in this area before jumping on a move.

These were not the headlines the crypto press was reporting, however.

Instead the move was written off as a “bear trap,” a way to liquidate traders who had gone short Bitcoin. The blocking of a messaging platform used by Russian traders, Telegram, and the shutdown of a crypto mining operation were seen as evidence Russians could not be behind the move.

Maybe. But reports are coming out of Russian hotels accepting cryptocurrency on room reservations for the World Cup. A Russian bank is testing the use of cryptocurrency for purchases. The Russian government reportedly helped Venezuela set up its own petroleum-based cryptocurrency to defy U.S. sanctions. (The U.S. government has banned that Venezuelan cryptocurrency, by the way.)

The Fog of News

The “where” of Bitcoin’s sudden rise is obscuring the “why.” Despite the personal friendship between U.S. President Trump and Russian President Putin, the two countries are clearly at odds over Syria, the Russian chemical attack in England, and a host of other issues.

The U.S. government launched sanctions against seven oligarchs tied to Putin on April 6, along with 12 companies they own or control. It was part of an ongoing battle that saw diplomats on both sides told to go home. The targets represent a significant chunk of the Russian economy and, thus, a huge chunk of money.

Russian billionaires have been expressing interest in cryptocurrency for months. Cryptocurrency is seen as a method for evading sanctions.

The Bottom Line

As stated at the top, cryptocurrency is a 24-hour market. Watching the clock, the times when trades are happening, can clue in even a dumb reporter to where buyers, or sellers, may be hiding.

Chinese government actions helped lead the market down, and Russian government actions may now be leading it back up. Chinese selling has been replaced by Russian buying, and as usual Americans are just along for the ride.

Some savvy traders here seem hip to all this. Now you are, too.

When it comes to cryptocurrency, who, what, why, and how often comes down to where.

Dana Blankenhorn is a financial and technology journalist. He is the author of a mystery novella involving Bitcoin, The Reluctant Detective Saves the World, available now at the Amazon Kindle store. Write him at danablankenhorn@gmail.com or follow him on Twitter at @danablankenhorn. As of this writing he owned no shares in companies mentioned in this story, nor any cryptocurrency. To follow the value of cryptocurrencies bookmark https://coinmarketcap.com.

Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, available at the Amazon Kindle store. Tweet him at @danablankenhorn, connect with him on Mastodon or subscribe to his Substack.


Article printed from InvestorPlace Media, https://investorplace.com/2018/04/bitcoin-btc-who-what-why-how-where/.

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