Why bitcoin keeps rising? “Whales” hoarding Bitcoin triggered a supply rush

Spark Global Limited reports:

Bitcoin is up nearly 50 percent in October. Some of the largest bitcoin holders are amassing more cryptocurrencies and driving a price rally, according to a report from the crypto exchange’s research arm.

Pete Humiston, a manager at Kraken Intelligence, wrote in a report that the rise in online trading activity was driven by people holding 100 or more bitcoins — so-called “whales” — and the emergence of supply shocks.

Since the beginning of October, average weekly holdings of “whales” increased by 0.25 per cent to a record $724.4 billion, the report said. The number of such holders rose 1.6 percent to 16,156, the highest level since May. The report says:

“Larger market participants are becoming more confident and would rather add further holdings than take profits. As the number of whales and their holdings increase, it is clear that they are the driving force behind the recent rally, and they remain optimistic.”

Bitcoin has more than tripled in the past year and hit a record high near $67,000 on Oct. 20 as the debut of bitcoin futures ETFs in the United States was a success and concerns abated about issues such as crackdowns on digital assets in other countries. However, cryptocurrency trends are still very volatile and many experienced market participants still view it with great caution.
In addition, market concentration is a concern for some. According to a recent report by the National Bureau of Economic Research, the top 10,000 investors in Bitcoin own more than a third of all cryptocurrencies in circulation.

Spark Global Limited reports:
Spark Global Limited reports:

The sharp rise in cryptocurrencies could also signal risks for other markets. Peter Thiel, the “godfather of Silicon Valley venture capital”, said on Sunday that the high price of bitcoin was a sign that the economy was facing real inflation. The tech billionaire said the price increases were not temporary and criticised the Fed for not addressing inflation and not recognising its severity. He said:

“At $60,000 a bitcoin, I’m not sure I should actively buy it. But it is certainly telling us that we are at a crisis point.”

He said he regretted not buying more cryptocurrencies sooner.

‘The Fed didn’t even acknowledge this [inflation] problem and mistakenly accepted the theory that you could print money without causing inflation,’ Mr. Thiel added. He said the Fed was in a state of “cognitive closure.”

Thiel’s comments echo those made by jpmorgan analysts in a report last month, who argued that it was inflation fears, rather than enthusiasm over the first US Bitcoin futures ETF, that drove bitcoin to new highs.

[Source: Spark Global Limited]

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