Bitcoin has made it into the news again after crossing the $11,000 mark on the last weekend and achieving the highest value that the cryptocurrency has seen during the last fifteen months. The spike comes after Facebook’s announcement of Libra quasi-cryptocurrency and other market forces.
Bitcoin managed to hit a high of $11,307.69 on Sunday evening and showed a gain of 20% in only a week. Prices were down on Monday but still wavering above and below $11,000 mark and ended the day at the mark of $11,070. This sudden jump is being attributed to Facebook’s digital currency, Libra, that has reintroduced cryptocurrencies to the public once again after the 15 months-period.
About fifteen months ago, the news was filled with 1,000% gains and overnight Bitcoin millionaires. This news led to speculations in cryptocurrency markets, thus creating a bubble that was popped soon as sell-offs at the height of craze sent the prices into a tailspin. Bitcoin hovered in the three-to-five thousand range for about a year and a half. However, it is witnessing some real action again where it has doubled in its value in only under two months.
Circle CEO Jeremy Allaire said, ‘There’s a broader understanding of crypto as an asset class. The anticipation that next generation of blockchains, including what we heard about last week with Libra Association, really indicates what is ultimately going to be a massive mainstream phenomenon touching billions of people.’ Forbes, on the other hand, attributes the rise in the Bitcoin’s value to the events in India.
The monetary policy by Indian Prime Minister Narendra Modi in 2016 was heavily criticized since the government banned high-value bank notes and with a recent crackdown against internet services such as Reddit and Telegram, people’s attention is being diverted towards cryptocurrencies and other decentralized internet services. The Indian government has also proposed a ban on cryptocurrencies in the country that might actually drive more people towards cryptocurrencies in the country.
As to the Facebook’s involvement, it seems unclear as to why it would cause a spike in Bitcoin’s value considering that Facebook is undergoing a lot of scrutiny from regulators in the US and Europe over its practices and how it handles the user data. Regardless of this debate, it remains to be seen if these value will stick or not. We will have to wait and see!