Truth or fiction? Algorithms determine Bitcoin’s price overnight

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Last Updated on 6 April 2024 by CryptoTips.eu

Back in November of 2021, the total market value of the crypto market worldwide was approximately $2.7 trillion. Then Bitcoin and the other major coins fell until a bottom was reached in November of 2022. FTX collapsed and Sam Bankman-Fried was arrested. Everyone thought it was over and done for crypto and Bitcoin as the total value of the crypto market fell to 850 billion dollars.

But look, as of this week the total market value of the entire crypto market is again 2.5 trillion dollars. We are right back where we were in 2021.

Why did this happen and what will happen next? And is it true that Wall Street’s algorithms and bots now determine the price of Bitcoin during the Asian trading hours (i.e. the early European hours)?

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Criminals and fines

As we count down to the April 20 halving (which could happen to pass a day earlier or later), the global media clearly still doesn’t understand why crypto isn’t dead and buried after the disaster year that was 2022.

This is mainly due to the fact that while in 2017 and 2018 (two bull runs ago) crypto still seemed like a realm of ‘shitcoins’ where anyone could create (and present) a cryptocurrency, make money from it and then drive the price down, such an action is much more unlikely in 2024. Even in 2021 and 2022 there were far fewer rug pulls and hacks than before, but the crypto market was still saddled with criminals and pyramid schemes, it seemed.

By now Sam-Bankman Fried (FTX) has been arrested and convicted, Do Kwon (Luna-Terra) awaits a similar fate upon arrival in Seoul (South Korea has obtained his extradition from Montenegro) and Binance was fined billions in the United States.

Crypto is acceptable as an investment in 2024 because rules have been imposed and measures have been taken.

Wall Street and technology

Secondly, there is interest from Wall Street in all things Bitcoin (and Ether). Analysts understood that if they could find an easy way for the boomer generation to purchase the biggest cryptocurrency, older Americans would also want to dive into the crypto market. At the beginning of this year, the Bitcoin ETF applications were approved and ever since then it seems as if we could set a new record every month.

Also the fact that Ether smoothly switched from ‘proof of work’ to ‘proof of stake’ last year and thus became much more environmentally friendly than Bitcoin, means that the same ‘boomer’ generation would probably also be very happy to invest in an Ether ETF (if the request for one would be approved this summer).

What can we now expect the coming months? First, there is the halving and it is still unclear how Bitcoin’s price will react to it in the short term. Will we set a new record before that halving or will we see a new ‘sell-the-news’ sales wave after April 20? Difficult to predict at his point.

Algorithms

There is also the novelty that bots are instructed to look at the latest purchase and sale figures of the Bitcoin ETFs in order to calculate what the price of Bitcoin will become the next day. If many shares of Bitcoin ETFs have been purchased, the price of Bitcoin will rise, if many shares have been sold, the price of Bitcoin will fall.

Because these ETF numbers are released after the stock markets on Wall Street close and just as the Asian stock markets open, we have recently seen a lot of movement in the price of Bitcoin during Asian trading hours.

Rumor has it that algorithms controlled by Wall Street companies always calculate what the price of Bitcoin will be and then automatically transmit their orders. We don’t know if it’s true, but it’s an interesting new theory.

What is already quite clear is that every analyst on Wall Street has by now adjusted their price target for Bitcoin this year to a higher level than at the beginning of 2024.

Jeroen Kok

Jeroen is one of the lead copywriters on Cryptotips.eu and discusses all recent events in the crypto market. This includes news updates, but also price analyzes and more. He developed his passion for cryptocurrency during the bull run in 2017. He has learned a lot since then. The combination of cryptocurrency and creative writing is perfect for Jeroen and an excellent way to share his knowledge with a wide audience. Find me on LinkedIn / [email protected]
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