Bitcoin Rising Amid Short Coverage, Amazon Plan Speculation

(Bloomberg) — Bitcoin rocketed Monday, approaching $40,000, a rally some attributed to traders abandoning betting on declines, as well as ongoing speculation about Amazon.com Inc.’s possible involvement. in the cryptocurrency sector.

The largest cryptocurrency rose a whopping 15% to $39,681 before capping off part of the climb to start trading at around $38,100 in Hong Kong as of 10:58 AM. Other virtual coins also rose, including second-ranked Ether.

“The magnitude of the jump was likely caused by over-leveraged shorts,” said Vijay Ayyar, Asia-Pacific head of Singapore crypto exchange Luno, while adding the Amazon rumors likely also played a part.

Amazon advertised a vacancy for a lead for digital currency products last week, sparking speculation that it could accept digital coins for transactions. That builds on other recent supports for Bitcoin, including positive comments from Cathie Wood of Elon Musk and Ark Investment Management LLC. Over the weekend, the coin’s price hit the 50-day moving average, a trend that some consider positive.

More than $700 million worth of Bitcoin shorts were liquidated on Monday, according to data from Bybt.com, most of every day for at least the past three months.

As prices moved higher on Monday, activity in Bitcoin futures soared. Over 1,000 contracts changed hands in a 10-minute trading window. As a result, volumes in the July front contract were about 10 times the average as of 9:20 am in Hong Kong.

Bitcoin remains about $27,000 from its mid-April high of nearly $65,000. It has been hurt by criticism of the energy consumed by its computer servers, a regulatory crackdown in China, and tighter official controls in Europe and the US.

Musk, chief executive officer of Tesla Inc. — which already owns Bitcoin — revealed at a conference last week that its space exploration company SpaceX does too. He added that he would like to see the token succeed and that he personally purchased Bitcoin, Ether and Dogecoin. Ark’s Wood said companies should consider adding Bitcoin to their balance sheets.

More stories like this are available on bloomberg.com

Subscribe now to stay ahead with the most trusted business news source.

©2020 Bloomberg LP