An increase in Bitcoin trading in the Asian markets has been identified as the cause of the latest Bitcoin price rally. Trading spikes in Japan, South Korea, and China triggered a flood of buy orders in the market, causing the price of the asset to climb dramatically. This phenomenon out of the far east is reminiscent of the late-2017 rally when the BTC price almost crossed the $20,000 milestone.
Spike in Japanese and South Korean Bitcoin Trading Volumes
According to Mati Greenspan, a senior analyst at eToro, both the Japanese and South Korean Bitcoin markets experienced a significant surge in trading on July 24, 2018, as the Bitcoin price broke $8,000. Meanwhile, Greenspan also reports that at the same time, there wasn’t any corresponding increase in U.S. market trading volumes. Thus, the eToro analyst concludes that Asia led the price rally above $8,000.
The surge above $8,000 was definitely led by East Asia. Take a look at bitcoin volumes in Japanese Yen and Korean Won at the time of the surge (13:30 – 15:00 on the chart).
In contrast, USD volumes had only a small spike and USDT (tether) remained constant through the movement. pic.twitter.com/fHdD8gRTTL
— Mati Greenspan (@MatiGreenspan) July 25, 2018
Before now, many analysts have tried to explain the reasons for the price increase. Some experts pointed to the buzz around a positive SEC decision on Bitcoin ETFs. However, the likelihood of a BTC ETF seems remote given that most of the SEC’s concerns haven’t been satisfactorily solved.
Affluent Chinese Run to Bitcoin as Hedge Against Currency Devaluation
In a related development, Clem Chambers, the CEO of ADVFN, recently identified China as a significant factor for the previous price surge on July 19. In an article published on Forbes, Chambers highlighted how the fallout of the trade war between China and the United States—and the decision by the former to devalue its currency—forced wealthy individuals to run to Bitcoin.
According to Chambers:
“The cause of the sudden unexplained spike is now clear to me. It is Chinese devaluation, a massive insider reaction to imminent, planned, significant and perhaps rolling Chinese currency devaluation that set off this rally. It was a group of insiders buying bitcoin for Chinese yuan before the devaluation that took place two days later struck. This devaluation process has been going on for weeks, but it accelerated last week.”
Based on Chambers’ explanation, it seems like BTC is becoming a lot like gold in the sense that people feel comfortable to use the digital asset as a haven against uncertain economic climates. With the ongoing tussle between both nations, the top-ranked cryptocurrency could become a much more alluring prospect to investors seeking to get away from the topsy-turvy mainstream market.