Mystery bitcoin buyer causes huge spike in price

By: Kevin D.

Somebody, somewhere is betting big on bitcoin.

The price of bitcoin surged above $5,000 for the first time this year after a mystery buyer placed a huge order — causing a one-day spike not seen since the peak days of the cryptocurrency’s bubble in late 2017.

The trading briefly sent the price of bitcoin to $5,078.52 early Tuesday, the highest price since November. The price settled to around $4,730 by the end of the day.

A single order worth about $100 million had been spread across multiple cryptocurrency exchanges throughout the world at the same time — evidence that the price surge came from a single buyer, Oliver von Landsberg-Sadie, CEO of cryptocurrency broker BCB Group, told Reuters.

However, it’s unclear who made the trades — or why.

“[There was a] lack of a clear catalyst or news that drove the move,” Michael Kazley, co-founder of investment firm Crescent Crypto Asset Management, told The Post.

“Feels like a classic short squeeze, where the threat of higher prices drives short sellers to buy back and close their positions,” Kazley added.

The jump comes as bitcoin has lost nearly all of its value amid government crackdowns, allegations of fraud and questions about whether investor optimism was overblown.

Even bitcoin investors Tyler and Cameron Winklevoss, who claim to have co-created Facebook, acknowledged in a CNN interview last month that investing in the digital currency has been rough.

The 23 percent increase Tuesday was the biggest one-day jump since December 2017, when bitcoin prices had neared $20,000 on some exchanges. The bounce revived the hopes of bitcoin investors after a tough 2018, when the digital currency lost more than 70 percent of its value.

Recently, questions have emerged about the health of the markets.

About 95 percent of bitcoin trading on exchanges with at least $1 million in trades per day is fake, according to a report from BitWise.