Cryptocurrency markets saw some welcome upward moves this week, with Bitcoin Cash leading the way. Billions of dollars entered the space and it led to growing optimism that the recent period of stagnation may be coming to an end, at least temporarily. Bitcoin Cash led the way, up nearly 40% in five days ahead of its hard fork in a week’s time, but other large caps followed suit, with XRP gaining 20% and Ethereum 13%.
Crypto Twitter reflected a growing sense of optimism, with even hardened bears seeming to believe that the uptrend might continue.
Market Cap Hits August Levels
The overall market cap, which has stayed almost solidly at $210 billion for the last three weeks, lost $7 billion towards the end of October before a healthy-looking steady climb upwards. This resulted in almost $20 billion being added since then, settling at the highest it has been for any meaningful length of time since August.
It remains to be seen if this is just a temporary boost or symbolic of something more long term. But, the fact that the increase has been gradual over the first week of November, compared to the sharp highs and lows that have been symptomatic of ‘bot’ buying and selling since the summer, bodes well.
Follow the Money
Not everyone is convinced about the viability of the sudden increase in volume however, or how long it might last. As one commentator pointed out, amid the overall volume spike has come some suspiciously large increases in volume for less well-known exchanges. Bitbank, for example, experienced a 170% jump in volume in one day, while Upbit leaped 98%. In contrast, Binance, the largest exchange by volume, experienced only an 18% increase the same day, suggesting that the recent growth may not be as organic as first hoped, and there may even be instances of wash trading going on in order to falsely inflate volume levels. This would also suggest that the supposed ‘new money’ coming into the space is not new money at all, but is in fact money that is being washed on smaller exchanges and only appears as new.
Time will tell where the truth of the matter lies, but for now it’s clear that investors are making hay while the sun shines.
