Bitcoin surges amid short covering, speculation over Amazon plan

Bitcoin soared on Monday to approach $40,000, a rally some attributed to traders exiting bets on declines as well as ongoing speculation over Amazon.com Inc’s potential involvement in the cryptocurrency sector.

Bitcoin surges amid short covering, speculation over Amazon plan
Business

Bitcoin surges amid short covering, speculation over Amazon plan

published : 26 Jul 2021 at 10:52

writer: Bloomberg News

Police in the Miri district police headquarters use a steamroller to crush bitcoin-mining machines, in the Malaysian Borneo city of Miri on July 16, 2021. The price of Bitcoin surged on Monday. (AFP photo / Courtesy of Dennis Wong)

Bitcoin soared on Monday to approach $40,000, a rally some attributed to traders exiting bets on declines as well as ongoing speculation over Amazon.com Inc’s potential involvement in the cryptocurrency sector.

The largest crypto rose as much as 15% to $39,681 before paring some of the climb to trade at about $38,100 as of 10:58am in Hong Kong. Other virtual coins also rallied, including second-ranked Ether.

“The extent of the jump was probably driven by over-leveraged shorts,” said Vijay Ayyar, head of Asia Pacific at crypto exchange Luno in Singapore, while adding the rumours over Amazon likely had a role to play too.

Amazon last week advertised a job vacancy for a digital currency product lead, stirring speculation it might accept digital coins for transactions. That builds on other recent supports for Bitcoin, including positive comments from Elon Musk and Ark Investment Management LLC’s Cathie Wood. Over the weekend, the coin’s price topped its 50-day moving average, a trend some view as positive.

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

As prices spiked higher Monday, activity in Bitcoin futures surged. Over 1,000 contracts changed hands in a 10-minute trading window. As a result, volumes in the July front contract were around 10 times the average as of 9.20am in Hong Kong.

Bitcoin remains some $27,000 off its mid-April high of almost $65,000. It’s been hurt by criticism of the energy consumed by the computer servers underpinning it, a regulatory crackdown in China and harsher official scrutiny in Europe and the US.

Musk, chief executive officer of Tesla Inc -- which already owns Bitcoin -- revealed at a conference last week that his space exploration company SpaceX also does. He added he’d like to see the token succeed and that he personally has bought Bitcoin, Ether and Dogecoin. Ark’s Wood said corporations should consider adding Bitcoin to their balance sheets.

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