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News Link • Bitcoin

Bitcoin Soars Above $1,600 On Relentless Japanese Buying Frenzy

• http://www.zerohedge.com, by Tyler Durden

Since then, bitcoin's latest exponential rise has only accelerated, and moments ago the price of the cryptocurrency surged as high as $1,600 on the Coinbase exchange, rising as high as $1,655 on the troubled Bitfinex exchange.

What is prompting this relentless surge in Bitcoin? 

Several things. 

The first, as we noted on Monday,  was "plain old supply and demand." While unclear if the result of a regulatory crackdown seen recently in Chinese-based exchanges, Hong-Kong based Bitfinex and some other crypto exchanges in the industry "have been dealing with liquidity and withdrawal issues the past few weeks." Specifically, Bitfinex had trouble processing transactions after the Taiwanese banks that handle them started blocking requests. That's part of a trend where some banks are pulling out of sectors they deem risky. A representative from the exchange had confirmed to the WSJ that the inability of investors to withdraw bitcoin is affecting the price. Perversely, instead of forcing the price of bitcoin lower, the liquidity squeeze was forcing traders to offer higher bids to get their bitcoin out, which is subsequently forcing the price up.

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