If you’re an aficionado in the crypto space, you’d be wondering why Bitcoin suddenly returned from the doldrums and is back up to over $8,000. A few reasons exist for this and they shall be considered briefly.
The first and most significant event that occurred today is the expiration of the CME Bitcoin futures. Most of the futures were shorts and this suppressed Bitcoin prices.
However, upon expiration of the futures which occurred at exactly 4.00 pm London time, the downward pressure on Bitcoin prices eased slightly which led to an uptick in prices.
This of course also coincides with today being the last Friday of the month as the CME effect has been well observed by many.
This is not to say however that the CME futures had an overwhelming influence on Bitcoin prices. It is significant but finite and this influence will decline further as institutional investors enter the market and broader adoption continues.
The second reason for the Bitcoin uptick is the arrest of the crypto capital CEO. Ivan Manuel Molina Lee and the allegations of money laundering against him have been a thorn in the flesh of many cryptocurrency exchanges particularly Bitfinex.
His arrest will give some respite to the already struggling cryptocurrency exchange which had to raise $1 billion in may using sales of tokens.
The liquidity gap and trust issues that many had against the cryptocurrency exchange created an unseen butterfly effect in the crypto space.
Of course, the Polish authorities are having a field day in what is easily the biggest case for them at the moment.
The third reason which is likely the most important one is the support given by Chinese President Xi Jinping as regards blockchain technology.
Apart from being the World’s second-largest economy and home to about 25% of the World’s population, this goes to show that the Chinese have made their stand clear when it comes to the technology driving the crypto space.
This means something and many may miss it: The Chinese are going into cryptocurrencies heavily or will want to work with blockchain technology on the broadest of scales.
Either way, one thing is certain: the crypto space has its groove back!