Topic: Why did the price of Bitcoin suddenly spike up (October 15, 2018)? - page 2. (Read 699 times)

it doesn't really work that way though!

first of all let me mention that the recent rise was not a rise at all but in  fact a fall. in other words value of Tether dropped so in order for altcoins to keep their value up they needed to rise against Tether and that is what happened here.

but lets get to the middle part of OP comment. when bitcoin rises (assuming Tether is worth $1) altcoins seemingly rise up but not because they keep their value, in fact they fall in value against USD and BTC but because this fall is not equal to bitcoin price rise, the final result is a rise. for example if bitcoin is $1000 and some altcoin is worth 0.1BTC and then bitcoin goes up to $2000 that altcoin, if it remains 0.1BTC will rise to $200 which is impossible for that coin to happen because there is nobody buying it. what happens is that rise of bitcoin from $1000 to $1000+ will start creating arbitrage opportunity in ALT/BTC and ALT/USD and as traders arbitrage this the final value of that coin will go somewhere between $100 and $200 and closer to lower bound. so the final result will be an altcoin worth around 0.06BTC which is a big fall but thanks to arbitrage traders the value of it rose a little to $120 in a fake manner.

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People used the USDT to store fixed money, but this happening will cause fear in the people against USDT, people will be less interested and this will affect the volume of Bitcoin. Maybe it will play a positive role for the future price.
The other way for storing is fiat which will cause to lose interest and i don't think more folks will try.
Already Bitcoin's price is more stable than USDT in recent days, it is best to try. 

Marius Kramer, No. 1 Bitcoin writer on Quora worldwide
Answered 8h ago
At first, there were scam rumors for Tether, because only USDT pairs pumped. Furthermore, there was the rumor that all USDT pairs will be delisted from Binance.

That’s why everybody thought all USDT pairs are pumping because everyone wants to get out of USDT.

An hour later Kucoin suspended tether deposits and withdrawals. https://www.google.de/amp/s/bitc...

These were all the assumption.

However, the actual reason is most likely very simple.

It was just a whale buying up lots of Bitcoin with lots of USDT that he held. In fact, he bought up $500M worth of Bitcoin, which made the Bitcoin market cap go up by $25B.

Here is how it works:

He buys up Bitcoin so that the price goes up by 10%. All USDT pairs pump by 10%, too.

So if IOTA is worth 9000 Satoshi, which is $0.5 and Bitcoin goes up by 10%, IOTA is still worth 9000 Satoshi, but then $0.55, so it shows as a 10% pump in the IOTA/USDT pair, while remaining stagnant in its BTC pair.

So, this doesn't have to do anything with Tether, just a whale buying lots of BTC. When that happens, USDT pairs always pump, because of math.

However, I don’t think it was an institutional investor, but someone who had lots of USDT. So, he bought $500M worth of Bitcoin with USDT. Since, this put a lot of USDT on the market, the USDT price tanked.

If you look at Top 100 Richest Bitcoin Addresses and Bitcoin distribution, there are currently only 3 addresses that hold that much wealth and they all belong to the exchanges Bitfinex, Bitrexx, Binance. That means, it must be a whale from January during the height of the bull run, where there were around 50 addresses with that much wealth.

It was probably one of the 10 largest Bitcoin whales who had cashed out half a billion into USDT back in January and now decided to sell all Tether, because of all the sketchiness surrounding it and because he thought Bitcoin has probably found its bottom. That’s why he decided to buy back in now.

Now, the Bitcoin/USD and Bitcoin/USDT markets have to even each other out at probably around $6,600.

If you found this answer helpful, please leave an upvote.

P.S. If you need help with your portfolio (larger than $200,000) for this coming bull run, I provide professional guidance for $500/week and a 10% profit share. However, only if you make profit. If you don’t make profit, there is no weekly fee

quora Marius Kramer

Could that be the reason why bitcoin's value is higher in bitfinex than other exchanges?
There us a wide gulf in price of bitcoin on the different exchanges at the moment.

I wouldn't call this a legitimate breakout. Rather a momentary spike in price caused by forces not directly connected with project development and adoption.

the question now is whether technical traders view this as a legitimate breakout or not.

you could think of it as USDT whales or bitfinex whales. bitfinex = tether. they are one and the same, owned by the same people. that's why USDT trades as USD on bitfinex markets.

it's at least partly to do with bitfinex's banking problems. they shut down fiat deposits and there have been withdrawal delays, so people are panicking about insolvency. that's why people are willing to pay a premium (>5% right now) to get their USD off bitfinex (or out of USDT) via the only possible exit route: buying crypto.

the question now is whether technical traders view this as a legitimate breakout or not.

You don't have to include these lines:

"Answered 8h ago"

"f you found this answer helpful, please leave an upvote."

"P.S. If you need help with your portfolio (larger than $200,000) for this coming bull run, I provide professional guidance for $500/week and a 10% profit share. However, only if you make profit. If you don’t make profit, there is no weekly fee"

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Anyways, the author have some good insights and analyzation about the "specific reason" why the price rallies today. However, there are still other factors that we can look into why it turned out like that. As of typing, price went back again to $6,400+ spoiling the sudden excitement of an average joes.