Hedge Funds Behind Bitcoin Explosive Price Rally, Say Experts

For a market that prides itself for being decentralized, bitcoin appears to be a lot in control of a few players only.

The first and the foremost cryptocurrency registered an explosive growth in the first half of 2019. As of today 16:31 UTC, bitcoin was trading 177 percent higher from the year’s opening rate of $3,691.87, which is exponentially higher than what the benchmark S&P 500 Index and Gold returned. But, as the latest issue of FN London describes, the bitcoin price rally could have been driven mainly by crypto-focused macro managers, not the retail investors per se.

Bitcoin Price Up 177% YTD | Image Credits: TradingView.com

Jamie Farquhar of blockchain advisory group, NKB Group, told FN London that institutional investors drove their capital into the bitcoin market. The portfolio manager believed that most of those institutions, being small-scale, pushed bitcoin dominance rate — the portion held by bitcoin in a broader cryptocurrency market — higher nevertheless.

“Macro managers and high net worth individuals are generally, in my experience, focused almost entirely on bitcoin,” Farquhar added.

The Great Institutional Bitcoin Pump

Farquhar’s statement followed months of speculations about the market catalysts that drove the bitcoin price higher, especially during the second quarter of 2019.

Forbes reporter Bryan Rich hinged the bullish price rally on a weaker Yuan sentiment, hinting that it was the Chinese people who, to circumvent state-imposed capital control, dumped their fiat for bitcoin. At the same time, several other media reports claimed that a weaker US dollar, especially after the Federal Reserve’s decision to cut interest rate in July pumped the cryptocurrency to its year-to-date high of $13,868.44 ahead of the June close.

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