Bitcoin Price Spike Blamed on April Fool's Joke?

• Bitcoin has one of its best days in many months, up more than 16%

• Rumors that trading algorithms picked up reports of bitcoin ETF being approved

• Reuters reports of a private buyer purchasing more than $100 million worth of bitcoin over a short period

• CEO of BKCM Brian Kelly adds that bitcoin hit a key technical level, which has helped boost the price

CNBC says Bitcoin’s Tuesday spike was blamed on an April Fools’ joke, but notes that’s not why it rallied.

The price had shot up to over $5000 on Tuesday, an increase of over 15% in less than an hour before pulling back.  As of the overnight hours into Wednesday morning, the price continued to hover above the $5000 mark.

A series of whacky Bitcoin conspiracy theories surfaced Tuesday that some attributed to its rally.

Rumors that trading algorithms picked up reports of bitcoin ETF being approved. But experts say that’s not the real catalyst.

“It’s absurd to believe this market move is the result of confusion about the Bitcoin ETF filings,” says Hunter Horsely, who is in the process of applying for a bitcoin ETF.

While there were a series of Bitcoin April Fool's jokes, including one that claimed robots triggered a buying frenzy, experts say these jokes have nothing to do with the positive trading frenzy.  The upward trend continued into Tuesday evening, long after all those April Fool's jokes had subsided.

The most likely explanation, according to Horsely, is a Reuters report of a private buyer purchasing more than $100 million worth of bitcoin over a short period. Given the small daily trading volume of bitcoin, “that order would be enough to have an impact,” he said.

“Crypto is famous for a long history of volatility like this. It’s always hard to pin down the true impetus, and often the real source is not obvious,” Horsely said.

CEO of BKCM Brian Kelly adds that bitcoin hit a key technical level, which has helped boost the price.

“Everyone who panicked and sold is already out,” Kelly told CNBC Tuesday.

Arca Chief Investment Officer Jeff Dormanhis said this particular rally was caused by a “simple” imbalance of more sellers than buyers, he said.

“The large magnitudes of the moves in crypto make it more interesting of a story, but it’s not that different than any other asset class,” Dorman said. “Buyers outweighed sellers, and market makers felt the pressure so they took their markets higher, which triggered stop losses and liquidations, which added more buy pressure.”

He added: “The fact that every small dip has been bought immediately in the last few weeks shows that investors are not scared of sell-offs, they are hoping for them so they can buy more,” he said. “This certainly raises the near-term floor, but this sentiment can change on a dime too.”

Bitcoin accounts for better than half of all funds transfers for North American facing online gambling sites.

- Aaron Goldstein, Gambling911.com