The highly anticipate pre-halving bitcoin bull-run may have started as the coin has seen double-digit percentage point gains in the last 24 hours.
According to data from Luxemburg-based cryptocurrency exchange Bitstamp, the price of the flagship coin rose from the high $7K’s in the morning hours of Wednesday GMT and has since peeked out at about $9,500 in the wee hours of Thursday.
This represents a 19% jump, the largest single-day jump since the Black Thursday ‘bloodbath’ that saw the coin fall to yearly lows below $5k. As of press time, the coin has lost about $400 and is now trading in the low $9,000 region.
Despite the highly anticipated price gain, some major trading platforms were caught unaware of the subsequent rise in trading volume. Coinbase, a leading US-based exchange together with its professional-focused platform Coinbase Pro reported both site and API overloads following the increased demand in the late hours of Wednesday. According to the Coinbase status page, the issue has been resolved as of press time and the systems are up and running.
Kraken, another major crypto exchange and one of the longest-running trading platforms in the industry was not spared of the network outages. Happening around the same time as Coinbase’s outages, Kraken also reported site and API traffic overloads. Similar to Coinbase, The Kraken status page also reports that the issues have been fixed.
These incidents show the increased interest that Bitcoin is currently getting as it approaches the halving event scheduled in under two weeks. So far, the price of Bitcoin has seen minimal increases casting doubt on the popular narrative that previous halving events told.
Bitcoin has experienced two previous halvings – the first one happening in 2012 and the second one in 2016. In both incidents, the price of Bitcoin rose significantly before and after the halvings. The late onset of the price increment in the upcoming halving saw market analysts speculate that the current price of Bitcoin had already factored in the highly anticipated event.
The upcoming bitcoin halving event may help explain the bitcoin price rise in the last 24 hours but it does not explain why it happened now. To answer that we will have to look towards the traditional markets which have also posted noticeable gains in the same time frame.
The S&P500 Index is up 2.4% while the tech-heavy NASDAQ and Dow Jones Industrial average are also up 3.00 and 2.15% respectively. These may seem like modest gains but they represent impressive gains in a single day given that the overall market is currently in a slump thanks to a relentless global pandemic.
A good explanation for the uniform green candles across the traditional markets and the virtual assets is the ongoing stimulus roll out by the US Federal Reserve. In an attempt to jump-start the economy, the US government is conducting what it calls a Quantitative Easing exercise in which it buys up Treasuries and mortgage-backed securities from the public.
The exercise may be seeing some positive results and given that two of the biggest US-based crypto exchanges saw network outages, it is safe to assume that the bitcoin price rise may have been influenced by the ongoing Federal Reserve activities.