February 20, 2019 | 0 comments

Bitcoin on course to match longest winning streak of 2018

Go Home / News / cryptocurrencies

Bitcoin was set on Wednesday to match its longest winning streak of last year, with traders ascribing a potential sixth straight day of gains to heavy buying of smaller coins and perceptions that cryptocurrencies are gaining ground in mainstream finance.

Bitcoin, the original and biggest cryptocurrency, has gained over 10 percent since Wednesday. The No.2 coin by market capitalisation Ethereum has gained 21 percent in the same period, with No.3 coin Ripple's XRP gaining 9.5 percent.

Six consecutive days of gains is a rarity for bitcoin that it last saw in July - a bright patch during 2018 when bitcoin's value crashed by three-quarters. Prices have not recovered since, with bitcoin trading at between $3,000-$4,000 this year.

The entry of mainstream investors into cryptocurrencies and the clearer regulation of the industry - both widely cited as probable catalysts for price moves - have not happened on any meaningful scale. Bitcoin was trading around $3,920 in early afternoon, up 0.5 percent on the day.

Momentum to the rally

Traders and analysts cited a drip of news perceived as positive for the uptake of cryptocurrencies by mainstream finance and consumers as giving momentum to the rally, including JP Morgan's introduction of a digital coin for payments on its private blockchain.

Mati Greenspan, an analyst with eToro in Israel, said a shortage in the creation of Ethereum added momentum to the rally in bitcoin. Price moves between cryptocurrencies are highly correlated, and a spike in the price of Ethereum on Sunday preceded a 7 percent gain for bitcoin on Monday.

"You have to think of the crypto trader at their desk - they see moves across the board and then buy up their favourite coins," Greenspan said. "By now it's already just full-blown optimism."

So-called alt coins have also gained heavily in the last week, with EOS and Litecoin gaining 35 percent and 21 percent respectively since Wednesday. Moves in these coins preceded buying of bitcoin, said Josh Bramley, head trader at crypto wealth management firm Blockstars.

The identity of those driving bitcoin's rally is impossible to ascertain.

Oliver von Landsberg-Sadie, CEO of prime brokerage BCB Group, said specialist cryptocurrency hedge funds based in London and the Cayman Islands had made orders in recent days.

Non-cryptocurrency funds worth around $100-200 million have this month registered interest with BCB Group but have not yet placed any orders, he said.


Photo: Shutterstock

Reuters European Business Report

© 2018 Omega Group