The price of bitcoin on the CoinDesk USD Bitcoin Price Index (BPI) rose more than 10% today to reach a press-time high of $443.69, its highest total since 18th September.
Prices on the USD BPI were up 11.12% at the time of publication, rising from an open of $398.89 and a low of $391.46 observed at roughly 10:10 BST.
Though there has been much speculation regarding bitcoin’s most recent price downturn – with debates raging as to whether widespread merchant adoption and increased industrial mining were adversely affecting price, the latest increase has largely been attributed to a single news event.
Increases in price across nearly all major exchanges were observed from roughly 13:15 BST to 14:30 BST, starting just minutes after news from PayPal, which today revealed that online merchants may now accept bitcoin via digital currency payment processors BitPay, Coinbase and GoCoin on its PayPal Payments Hub platform.
The price had been floating upwards of $460 throughout the month, before a sharper drop on 18th September brought it to a low of $387.76. Until today, the price had hovered around the $400 mark for most of the week.
Raffael Danielli, who follows bitcoin price movements on his personal blog Matlab Trading, suggested that the correlation between the news and the price upswing was inarguable, as evidenced by data charts from major exchanges.
He told CoinDesk:
“The spike today is a nice example of news hitting the market and how the market reacts.”
Similarly, the price of bitcoin on the CoinDesk CNY BPI rose to a ¥2,717.18 high, an approximate 7.07% hike from the day’s opening price of ¥2,472.20.
USD prices rocket on news
Though most recent price fluctuations have only proved loosely correlated with news, the latest spike is notable as it seems to have directly followed the initial publication of PayPal’s partnership by publications such as CoinDesk, Forbes and TechCrunch.
The price of bitcoin on Bitstamp, the world’s largest USD bitcoin exchange according to BitcoinCharts, rose wildly from roughly $395.29 at 13:15 BST to $450.00 just one hour later at 14:15 BST.
Prices on Hong Kong-based Bitfinex rose similarly, climbing from roughly $397.06 at 13:15 BST to $445.27 over the next hour.
CNY prices follow suit
Prices on major CNY exchanges followed a similar trajectory as those on major USD exchanges, though prices had declined in the market since hitting peak as of press time.
For example, the price of bitcoin on Huobi rose to ¥2,735 at 14:30 BST, up from ¥2424.70 at 13:15 BST, when prices started to rise on the exchange.
Data from OKCoin, China’s largest exchange by volume, shows a similar trajectory.
Market shorting declines
As a positive sign that the latest increase in price may mark a reversal of the most recent downtrend, data from BFXdata showed that there was also a change in how investors were betting on the future prospects of bitcoin today.
Following a sharp uptick in active bitcoin swaps beginning on 20th September, BFXdata illustrated that this market behavior declined precipitously beginning at 14:15 BST.
Bitfinex is one of three major bitcoin exchanges, including BTC-e and OKCoin, that offer margin trading. The investment tool allows investors to short or long the market, effectively placing wagers on the future negative or positive performance of bitcoin.
The decline in total outstanding swaps suggests a number of investors may have closed their short positions on bitcoin, though since the data provides only the total sum it is not known how many traders have closed those positions.
Additional reporting contributed by Tanaya Macheel
Images via BitcoinWisdom; BFXdata; and Shutterstock