Analyzing the bitcoin price surge in April


On April 2, 2019, bitcoin prices rapidly rose more than 20%, from $4,173 to $5,055 per coin. This was the single largest intraday price rise for bitcoin since December of 2017 — a period of time which saw the bitcoin price reach an all-time high.

Initial media reports offered varying explanations for the sudden surge in activity, suggesting the price rise was caused by April Fool’s hoaxes or short squeezes. Perhaps the most cited explanation were reports indicating that a $100 million buy order spread across certain exchanges, including Bitstamp, caused the price rise. We have found, however, that this suggestion lacks plausibility. In this report we analyze exchange data from various platforms to understand trading activity on that day.


Bitcoin prices reach highest levels in months

Bitcoin prices have steadily traded down since August of 2018, amidst concerns including: “hash wars”; regulatory pressures from the SEC; and, a lack of clear, positive catalysts for the space, such as the approval of an ETF.

However, this downward trend reversed in the first week of April, amidst a surge in trading activity as the bitcoin price reached its highest level in months. In the chart below we diagram TradeBlock’s bitcoin XBX index price over time. To view all 10 of TradeBlock’s digital currency indices, visit here.

Figure 1: Bitcoin Prices Over Time

Bitcoin Prices Over Time

Data for chart sourced from the TradeBlock Professional Platform


Previous explanations lack plausibility

In the hours and days following the initial price rise, various media outlets cited an executive at a London-based digital currency firm who claimed that the price rally was caused by a single Bitcoin order worth $100 million spread across three exchanges: Bitstamp, Kraken, and Coinbase.

Our analysis of trading data across various exchanges does not support the assertion that the initial surge in trading activity was attributable to activity on Bitstamp. Our analysis indicates that the vast majority of trading activity (~51%) that occurred during the initial spike in volume was executed at Bitfinex, a point which has not been widely referenced. Notably, there was a significant increase in trade executions and volume at Bitfinex that was recorded very close to the start of the initial price run.

Without identifiable trade data from various exchanges it would be very difficult to accurately attribute trading activity to a specific order, namely the $100 million order in question. Even if identifiable trading information were accessible, different exchanges would most likely not use equal identifiers for traders across different venues.


Initial surge began at Bitfinex, Coinbase, and Kraken

The primary surge in trading activity, on April 2, 2019, was initiated across three exchanges: Coinbase, Kraken, and Bitfinex. Beginning at 12:25 a.m. ET Bitfinex began to see accelerated trading activity. In the figure below, we visualize bitcoin trading activity (price impact and volume) across various exchanges, as the trades occurred.

Figure 2: Cross-Exchange Trading Activity

Cross-Exchange Trading Activity

Data for chart sourced from the TradeBlock Professional Platform

Between 12:25 a.m. ET and 12:30 a.m. ET 424 orders, representing more than $950,000, were executed on Bitfinex — a 480% increase in order executions compared to the prior five minute period. In the figure below we diagram executions, across some of the largest digital currency exchanges, over time.

Figure 3: Trade Executions Over Time

Trade Executions Over Time

Data for chart sourced from the TradeBlock Professional Platform

As shown in Figure 3 above, the largest surge in activity began at 12:32 a.m. ET, when Coinbase, Bitfinex, and Kraken experienced considerably increased trading activity. During this one minute period, 2,861 orders totaling more than $9,670,000 were executed across these three exchanges. This represents approximately a six-fold increase in order executions minute-over-minute. The surge in activity at 12:32 a.m. ET was the largest volume spike of the day, on a per minute basis.

While media outlets reported that the price action was spurred by activity on Bitstamp (among other exchanges), we found that the primary volume surge occurred at Bitfinex and Coinbase, where volumes were considerably higher than those at Bitstamp. By 12:33 a.m. ET on April 2nd, Coinbase had transacted in more than two times the trading volume as Bitstamp while Bitfinex had transacted in more than four times (see Figure 3 below).

Figure 4: Cumulative Trading Volume (USD)

Cumulative Trading Volume (USD)

Data for chart sourced from the TradeBlock Professional Platform

Breaking down the volume surge further, we see that Bitfinex gained the greatest market share during the initial spike. Between 12:29 a.m. ET and 12:35 a.m. ET, Bitfinex maintained 51% of the total bitcoin trading market share across US accessible exchanges. In the preceding 30 minutes prior to the initial surge, Bitfinex had maintained a more modest 19% market share. In the figure below we record per minute notional trading volume (USD) across each exchange for bitcoin (XBT/USD) pairs.

Figure 5: Exchange Market Share Over Time

Exchange Market Share Over Time

Data for chart sourced from the TradeBlock Professional Platform

The number of trades executed at Bitfinex during this short period of time on April 2nd was significant. In the chart below, we diagram the number of trades executed over a 72 hour period. While each exchange demonstrated an uptick in the number of trades, Bitfinex saw by far the largest number of executed trades. In the figure below we diagram the number of trade executions across US accessible exchanges over a 72 hour period.

Figure 6: Trade Executions across US Accessible Exchanges Over 72-hour Period

Trade Executions across US Accessible Exchanges Over 72-hour Period

Data for chart sourced from the TradeBlock Professional Platform


Price peak reached one hour after initial volume surge

As trading volume increased, prices rose until reaching a peak nearly one hour after the initial spike in volume. At 12:30 a.m. ET, TradeBlock’s bitcoin XBX price index was steady at $4,184 per coin. By 12:40 a.m. ET, just ten minutes later, XBX prices stood at $4,469 — an increase of 6.8%.

Prices continued to rise with limited short termed pullbacks until reaching a peak of just over $5,070 per coin, at 1:23 a.m ET — nearly one hour after the initial volume increase (see Figure 6 below). Over this one hour period, bitcoin prices gained nearly 22%.

Figure 7: Bitcoin Prices and Volume Over Time

Bitcoin Prices and Volume Over Time

In analyzing trading activity across various exchanges, we have concluded that the price rally most evidently began at Bitfinex, Coinbase, and Kraken — with Bitfinex transacting in the majority of the activity during the price rally. While we cannot rule out the presence of algorithmic trading, or April Fool’s hoaxes as catalysts for the initial surge in volume, we remain skeptical of previous articles that suggested a $100 million buy order on Bitstamp, and two other exchanges, was the initial cause of the rally (given the low volume and lag time on Bitstamp relative to Bitfinex and other exchanges).


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