• Some speculated that the jump was fueled by an April Fools' Day story about the SEC approving bitcoin ETFs.
  • "You literally can't make this stuff up," said one market participant.

The more than 23% surge in bitcoin on Tuesday to past $5,000 is causing traders to scratch their heads at just what would fuel such a sharp, sudden rally.

Some speculated that the jump was fueled by an April Fools' Day story on the website Finance Magnates which said the US Securities and Exchange Commission was approving a bitcoin exchange-traded fund after an "emergency meeting."

"The United States Securities and Exchange Commission has made the decision to approve not one, but two applications for Bitcoin-based exchange traded funds (ETFs)," the site said. "Early next month, Bitcoin ETFs will be launched by Bitwise Asset Management and investment management firm VanEck."

It's unclear whether the gag was indeed the culprit, especially since the report came out the day before. Also, preceding story in brackets was the phrase in all caps: [April Fools!].

There was $415 million worth of short positions that the market might have been eager to bet against, said George McDonaugh, CEO and Co-Founder of KR1, a London cryptocurrency and blockchain investment company.

Still, traders are stumped.

"There's always a myriad of possible reasons why bitcoin has had a surge in price," said McDonaugh in an e-mail.

"There have also been rumours about buying bots going awol after some fake news about an ETF green light from the SEC was released as part of an April Fools' joke. You literally can't make this stuff up."

"I'd veer towards the first explanation than the second," he said.

Another analyst said the move was likely down to technicals: "The price passed the $4,200 level to the upside overnight, a critical level that the market has been eyeing for a while. At this point, stop losses triggered a chain reaction and sent the price soaring," said Mati Greenspan, a senior market analyst at eToro.

Before the rally, bitcoin had been having a quiet year, hovering between $3,400 and $4,000.

It's a far cry from 2017, when crypto mania seized investors. Bitcoin began that year worth less than $1,000 per coin before soaring by more than 2,000% to a high of $19,511. Bitcoin plummeted 70% in 2018, reaching a low of $3,136 in December.

Jonathan Garber contributed to this report.

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