Bitcoin is up 12% this month — even though barely anybody is trading it

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Bitcoin has rallied sharply this month — but not for reasons you might think.

The world's largest digital currency has risen more than 12% since the beginning of June. On Wednesday, its price topped $30,000 to hit its highest level since April 14, according to Coin Metrics data.

Market players have attributed the jump to the news that U.S. asset management giant BlackRock had filed for a spot bitcoin exchange-traded fund tracking the market price of the underlying asset.

While that may be part of the reason, the outsized moved can be put down to another factor beyond the news flow surrounding large institutions taking steps to embrace bitcoin or other digital assets.

Crypto «market depth» has been sitting at very low levels this year. Market depth refers to a market's ability to absorb relatively large buy and sell orders. When market depth is low and big players put in orders to buy or sell digital coins, prices can move in a big way up or down, even if the orders are not that huge.

Market depth is a measure of liquidity in a market.

According to data firm Kaiko, bitcoin's market depth has fallen 20% since the start of this year. Bitcoin has been one of the hardest-hit cryptocurrencies in terms of market depth, Kaiko said.

«Bitcoin's recent surge in value has largely been driven by large trades within a less liquid market,» Jamie Sly, head of research at CCData, told CNBC via email.

«Our analysis of market orders over 5 BTC reveals an aggressive surge in market buying, suggesting large players are seeking to gain exposure to digital assets.»

«When combining large orders with thin books, the market is subject to more volatile movements,» Sly added.

That lack of liquidity has in part been driven by the