- Bitcoin is racing towards $14,000 as volumes on OTC and exchanges hit new highs for the year
- Its performance has outpaced nearly every asset, including gold, FAANG stocks and the S&P 500
Bitcoin picked up more than $2,000 in fresh gains over the last 24 hours, adding to its year-long rally that has outpaced practically every other financial asset.
At last check the cryptocurrency was trading at $13,720 a coin, a more than 200% increase since the beginning of 2019. Elsewhere in the market for cryptocurrencies and digital assets, Ethereum and XRP have notched impressive gains year-to-date, beating benchmark indexes such as the Russell 2000 and S&P 500 as well as metals such as silver and gold.
Still, bitcoin’s 2019 gains have not yet recouped the losses of 2018, which brought the digital currency down a whopping 73%.
While it’s hard to pinpoint exactly what is behind a given price move in the unpredictable cryptocurrency markets, there are a number of positive developments that could be behind the bullish sentiment driving up prices.
For one, a number of efforts to help scale bitcoin have seen progress in 2019. Things like Segwit implementation and batching have played a role in making bitcoin transactions less costly. The Lightning Network has seen notable growth over the past year, surpassing 2,800 nodes and a total network capacity of $2 million.
At the same time, Wall Street sentiment has been quietly changing. Bakkt, as The Block previously reported, is set to begin testing of its futures product in July. Meanwhile, action on bitcoin futures-trading platform CME is heating up. The Chicago-based venture exchange said on Twitter last week that open interest for its product spiked to an all-time high of 5,311 contracts, worth approximately $246 million. Asset management giant Fidelity has also started custodying and trading of bitcoin for a number of clients in certain U.S. states.
Facebook also announced earlier this month that it would gate-crash the crypto world with Libra, a stablecoin-like token backed by a basket of currencies.
Volumes are picking up
Genesis Global Trading, an over-the-counter trading firm, has seen its volumes spike, its CEO Michael Moro told The Block.
“I looked at this yesterday, and our volumes are 2x to 3x higher than where they were 12 months ago,” Moro said.
He said the client base has remained the same — mostly hedge funds and family offices — but he said recently the firm has seen new interest from endowments of private schools.
Exchanges are seeing similar activity. LMAX Digital, a UK-based trading platform aimed at institutions, reported a record day on Saturday of $650 million in volumes.
As for U.S.-based Coinbase, the firm said its over-the-counter trading desk has been so busy executing orders a representative of the desk could not be reached for comment.
“It’s a pretty busy day over here,” a spokesman said.