Elon Musk's tweet sparked an inflow of retail investors
On January 29, American entrepreneur Elon Musk tweeted a message with the text "it was inevitable" regarding bitcoin, which drew worldwide attention to the cryptocurrency.
As a result of the publication of the tweet, the price of the first cryptocurrency jumped from $32,000 to $37,000 in a few minutes, and the cryptocurrency exchange Binance saw a record influx of new users. Because of this, the site suspended withdrawals for a short time.
Elon Musk's message wasn't the only catalyst for Bitcoin's rise - January 29 also saw the expiration of a $3.2 billion Bitcoin option.
"Immediately after the expiration, bitcoin rose by $5,000. The cause was either the expiration date itself or Musk's tweet," said Luuk Strijers, chief operating officer of cryptocurrency derivatives exchange Deribit.
According to cryptocurrency broker FalconX, it was retail investors who caused bitcoin's price to rise. Thus, during the rise in the price, bitcoin trading volume from hedge funds fell by 45%, but retail investors immediately increased trading by 1100%.
"I think there is a correlation with the Wall Street Bets community on the Reddit forum. Moreover, trading volumes were made by users from the United States, "- said Aya Kantorovich, Head of Institutional Investors at FalconX.
We recall that this week users of the Reddit forum " broke " the price of GameStop network shares, so that institutional investors suffered losses. Interest in the cryptocurrency industry has also increased.