Bitcoin Price Climbs Past $460 After Craig Wright Stumble

Bitcoin has had a quiet week, experiencing low trading volume and rather modest price changes despite the Craig Wright controversy.

AccessTimeIconMay 6, 2016 at 8:46 p.m. UTC
Updated Sep 14, 2021 at 1:59 p.m. UTC

Bitcoin has had a quiet week, experiencing low trading volume and rather modest price changes as market observers saw Australian academic Craig Wright claim to be Satoshi Nakamoto, the pseudonymous creator of bitcoin.

On the other hand, ether – the native token of the Ethereum network – fluctuated far more significantly in terms of price during the seven days through 6th May.

Market participants traded only 7.7m BTC during the period, Bitcoinity data reveals – far less than many recent weeks. Ether saw reasonable transaction volume, as the digital currency reached 24-hour volume of $11.6m at 23:59 UTC on 28th April and $18.3m between 00:00 and 04:23 UTC on 6th May.

Bitcoin started the seven-day period with a price of $449.86 on 29th April between 12:00 and 02:59 UTC, the CoinDesk USD Bitcoin Price Index (BPI) reveals. It surpassed $455 between 18:00 and 20:59 UTC on that day, reaching a high of $456.84 for the period, and then proceeded to fluctuate largely between $450 and $455.

Yet the week of calm is showing signs of giving way to some weekend volatility. At press time, the price of bitcoin has begun to climb further, reaching a high of $461.54.

Craig Wright’s claim

The currency then fell below the key levels of both $450 and $445 between 06:00 and 08:59 UTC on 2nd May, additional BPI data show – the day Wright proclaimed himself the creator of bitcoin.

Gavin Andresen, a noted developer and maintainer of Bitcoin Core, and Jon Matonis, a Bitcoin Foundation founding director, both wrote blog posts supporting Wright’s claims.

Yet his assertion generated skepticism, and the proof he provided to support his claim was quickly debunked, as members of the bitcoin community revealed it was merely a key from a 2009 bitcoin transaction.

He later stated he would provide additional information to prove himself, but later reneged on the promise and deleted those related blog posts.

Steady markets

Wright’s claims seem to have had little impact, as bitcoin’s weekly low, reached between 09:00 and 11:59 UTC on 2nd May, was only $439.89.

The identity of Satoshi “may not be all that important, except for the 10% of bitcoin he holds,” Tim Enneking, chairman of Crypto Currency Fund, told CoinDesk.

After reaching the low point, the currency quickly recovered, surpassing $445 between 18:00 and 20:59 UTC and spending the remainder of the week fluctuating largely between $445 and $450.

The week’s relatively quiet nature was supported by long-short data from full-service bitcoin trading platform Whaleclub, which director of operations Petar Zivkovski indicated changed little during the period.

“One noticeable pattern we have detected is that some traders, possibly swing traders, have started to close out their long positions and take profit,” he told Coindesk. “This is most likely because [the] price has failed to rise as quickly as they had hoped and they perhaps see an opportunity to buy in at a lower price in the near future.”

Zivkovski pointed to figures that he said indicate bitcoin’s prospects in the near future.

“The current long-short ratio is 4.8:1 in favor of longs,” he told CoinDesk at roughly 10:30 UTC on 5th May. “This signals that the market overwhelmingly expects more upside in the days and weeks ahead.”

A technical analysis of the market also suggests that bitcoin could soon enjoy price gains. The digital currency recently rose about 10%, and has been putting in a support level over the last two weeks, Enneking argued.

Foundation building

While Craig Wright stole the vast majority of bitcoin-related headlines this week, there were another two pieces of news that could reduce bitcoin price volatility over time, Chris Burniske, analyst and blockchain products lead at investment management firm ARK Invest, told CoinDesk.

“One, AWS formally declaring its support for the space via partnership with [Digital Currency Group] is a huge validation, given AWS’s cloud capacity is an order of magnitude greater than its 14 closest competitors (that includes Microsoft),” he said. “As more people build on top of bitcoin and transactional liquidity builds, it follows that volatility should drop.”

Beyond that, Burniske spoke to a separate development that could help increase the availability of derivatives, securities that could prove integral in helping market participants manage the risk and volatility associated with the digital currency.

“CME Group Inc's (CME) public intent to publish pricing data is a significant step towards more bitcoin derivatives, and follows upon NYSE’s Index, which is owned by Intercontinental Exchange Inc (ICE), another derivative exchange heavyweight,” Burniske told CoinDesk, going on to say:

“If major exchanges are racing to build superior bitcoin indices, this lays the foundation for bitcoin derivatives, which would further open up the market to institutional investors."

While the broader bitcoin community might have been temporarily distracted by Wright’s claims to be the digital currency’s founder, several developments are brewing that could potentially bolster bitcoin’s credibility and push its price higher.

And though many critics have contended that bitcoin suffers from high volatility, this aspect may simply be part of a phase the digital currency will soon outgrow.

Charles L. Bovaird II is a financial writer and consultant with strong knowledge of securities markets and investing concepts.

Follow Charles Bovaird on Twitter here.


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