Yahoo Finance reported on the 25th (local time) that Bitcoin soared more than 10% because of the news that Amazon is pushing for cryptocurrency payments and the “short squeeze” phenomenon.
Short Squeeze refers to a phenomenon in which stock prices rise sharply as it intensively buys stocks due to losses caused by the rise in stock prices, even though stock prices were short-sold in anticipation of a fall in stock price.
For example, short-selling have put short-selling positions on the line, and if the stock price rises, the stock must be purchased and filled to reduce losses. This is called short covering, and when short covering is crowded, “short squeeze” occurs.
The higher the stock price, the faster the short squeeze phenomenon will be, and short-selling forces will gather more shares. Stock prices rise even more rapidly in the process.
The reason why the short squeeze phenomenon occurred on this day is that the price of bitcoin has risen significantly, unlike originally expected, with Bitcoin rising for six consecutive days.
In addition, news that Amazon is working to allow cryptocurrency payments also contributed to the surge in Bitcoin.
Amazon said in a job advertisement on the 24th that “the Amazon payment team is going to hire digital currency and blockchain experts.”
CNBC, a U.S. economic media, interpreted this as showing that Amazon is seriously considering allowing cryptocurrency payments such as Bitcoin.
Bitcoin recorded $38,323 as of 12 p.m. on the 26th (GMT+8), up 11.97 percent from 24 hours ago. Bitcoin once surpassed $39,000 and rose to $39,850.
