While many have speculated on the reasons why Bitcoin suddenly experienced a surge in price the likes of which haven’t been seen in months, the conclusion may have been easier to arrive at if we had just looked at the cryptocurrency’s trading volumes against multiple currencies.
Mati Greenspan, senior market analyst at eToro, found that the price may have been driven by a significant amount of capital flight from Japanese markets.
“According to the volume on exchanges, it seems clear that the rally is being led by East Asia… The leader is the Japanese yen,” he said in an email sent to Cryptovest.
Zooming in on BTC/JPY activity on the evening of July 24, we could see a steep climb in trading volumes in the hours that Bitcoin’s price was shooting upwards.
Although it’s not a surprise to see volumes reaching over 100,000 BTC against the yen, this particular spike was larger than anything we’ve seen for over a month. Recent policies by the Bank of Japan to devalue the yen may have driven this trade movement.
This is also visible, as Greenspan revealed, when we look at trading volumes against the Korean won.
Looking at Bitcoin’s own transaction rate provided by Blockchain.com, we can see that Bitcoin surpassed the 2.5 transaction per second threshold for the first time since February, indicating a surge in activity inside of the blockchain as well.
“This is a clear sign that whatever the reasons for the surge, the excitement doesn’t stop at speculation and we can indeed see momentum building in the Bitcoin network,” he said.
Speculators are likely selling their coins right now after the jump in price, but transactions are nonetheless moving in an upward trend.
Regardless of all these movements, one cannot cast aside US dollar activity on the market, which saw an intense spike just as the yen and won figures experienced their dramatic increases.