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Bitcoin Spike Driven By Japanese Trading, Move Away From Bitcoin Unlimited And Rising Altcoins

Last Updated March 4, 2021 4:56 PM
Lester Coleman
Last Updated March 4, 2021 4:56 PM

Bitcoin hit a new record high approaching $1,500 Tuesday, driven by global trading activity. The price was $1,474.01 as of Wednesday morning, according to Bitstamp.

The cryptocurrency has risen nearly 7 percent in the first two days of May.

A jump in global trading volume, particularly from Japan and the Japan-based bitFlyer exchange is fuelling the surge, according to CNBC .

Statistics indicated Japan’s currency JPY has been responsible for 52.35% of bitcoin trading volume in the recent 24 hours, followed by the USD at 28.12%, CNY 8.23%, EUR 4.92%, and KRW 2.9%.

The rise in value shows a surge in trading activity, nearly $700 million in bitcoin according to CoinMarketCap. The trading is markedly led by Japanese markets where the yen contributed to over half of the global trading volume over the last 24 hours.

Bitcoin Gains Investor Interest

Capital flows into bitcoin are also increasing worldwide.

Brian Kelly, the founder of Brian Kelly Capital, recently launched a digital assets fund for outside investors, noting the biggest driver is institutional investors in the digital asset sector.

Kelly referred to the incoming capital as “real money” that will be used to fund the new Internet, based on conversations with institutions and other investors.

Another factor Kelly noted is a consensus in the bitcoin community against Bitcoin Unlimited, which would divide the cryptocurrency into two coins. The momentum now is to support and upgrade the existing Bitcoin Core system.

Altcoins Rise

Analysts also noted ongoing investor interest in other cryptocurrencies such as Ethereum that have reached record highs, further boosting demand, according to Sunnarborg. These alternative digital currencies are usually bought and sold with bitcoin, requiring traders to buy bitcoin.

Ethereum’s Ether also hit a new all-time high in the past week as it surpassed the $80 mark, according to NASDAQ. Only two months prior, Ether was trading at around $15 per token.

The Ripple network is experiencing adoption by a large number of financial institutions to process domestic and cross-border payments. This, in turn, has sparked interest in Ripple’s digital currency, which has had an impressive rally in the last two months, increasing from $0.0054 on March 1 to $0.054 on May 1.

Litecoin has experienced an impressive rally since talks of SegWit implementation started. In a recent 30-day period, the price of Litecoin increased from $6.74 to surpass the $15 mark on April 25.

What Drives Japanese Trading

A report from Nikkei revealed that up to 18 companies are planning to apply for a special license to operate bitcoin and digital currency exchanges in Japan. Over 10 of the 18 companies are new entrants into the local bitcoin ecosystem in Japan, underlining the opportunistic interest among companies to tap into demand for the cryptocurrency which gained recognition as a legal method of payment last month.

The Yen-bitcoin trading is all the more notable given that Japan continues to impose an 8% consumption rate tax on purchasing bitcoin through exchanges. Toward the end of 2016, Japanese officials took the call to formally end this tax tariff, a move that will go into effect in July this year.

Bitcoin began trading above $1,400 in May and those gains have continued sharpish during the second day of the month. BPI data shows prices breaking beyond the previous all-time high of $1,350 on Sunday evening (UTC). At 17:00 on Monday, bitcoin was trading above $1,400 for the first time in history.

Prices below $1,400 in the early hours leading into Tuesday proved to be a minor drop rather than a correction. Instead, the bullish run resumed as prices jumped from $1,390 at 01:00 to $1,414.62 within the hour. A sustained run of trading saw a steady climb, gaining $20 near 10:40. The bigger spike was yet to come.

Trading around $1,435 mark at 11:00, yet another all-time high, prices jumped over 3% to scale a new unprecedented high of $1,481.7 within 20 minutes of midday, on Bitstamp.

Featured image from Shutterstock.