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Bitcoin price surges as cryptocurrency market springs to life. No one knows why | Los Angeles Times

Sudden swings in bitcoin are nothing new, but price moves had been relatively subdued this year — after last year’s 74% crash, investors have been rethinking whether the currency will reach mainstream adoption. Market participants say big buy orders in bitcoin can often lead to outsize moves, in part because volume is spread across dozens of venues.

Volatility can also be exacerbated by individual trend-following investors, as well as by “short covering” — that is, buying by traders who had previously borrowed the currency and sold it, betting on falling prices. As prices turn up, those short sellers can rush in to close out their bets.

“The bitcoin market and crypto market in general continues to be small relative to the rest of the markets — and emotional,” said Jehan Chu, managing partner at blockchain investment and advisory firm Kenetic Capital. “It’s still very much subject to waves of enthusiasm. I don’t think today is anything special.”

Shortly before 5 p.m. Pacific time, bitcoin was at $4,896.87 — up nearly 18% from a day earlier, according to CoinMarketCap. Rival coins ether, litecoin and bitcoin cash also jumped by double digits. Cryptocurrency-linked stocks including Remixpoint Inc. and CMC Markets also advanced.

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Bitcoin price surges as cryptocurrency market springs to life. No one knows why – Los Angeles Times.

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