The cryptocurrency market is full of peaks and valleys but at the moment, it appears that Bitcoin has hit a peak. Bitcoin surged past $11,000 USD for the first time in a year. The value of Bitcoin has jumped by 13% in the last 24 hours. Although the cyrptocurrency’s value dropped slightly once the heat of the excitement wore off, it is currently sitting pretty at roughly $10,600. Other cryptocurrencies such as Ethereum have also hit a ten-month high.
Bitcoin reached an all-time high in December 2017 at nearly $20,000. Its value dipped by 74% at the beginning of 2018, thanks to a slew of cryptocurrency regulations. A Bitcoin was only worth roughly $3,100 at the end of December 2018, but appears to have been gaining traction over the last few months. Why has the value of Bitcoin increased so quickly? Some have contended that Facebook’s Libra has caused investors to rethink cryptocurrency. Libra is a open-source digital currency and users will reportedly be able to send it to almost anyone in the world. Libra is backed by major companies like Visa, Mastercard, and PayPal and a pool of currencies and assets from around the world. Facebook also promises that the value of Libra will not fluctuate as much as other digital currencies.
It is unclear how exactly Facebook plans to stabilize the value of their currency, but its plans seems to have caught other's attention. Facebook boasts 2.38 billion users or over 30% of the world’s population. Some Facebook users certainly already use cryptocurrency, but many are likely unfamiliar or uncomfortable with it. Facebook’s Libra could potentially popularize use of digital currencies. Facebook’s Libra could also dominate the market and drive out other cryptocurrencies, but at the moment it appears it is having a positive effect on their value.
Some have also argued that Brexit has affected the value of cryptocurrencies. Politician Boris Johnson is likely to become the new British Prime Minister and he has promised to "deliver" Brexit by its October 31st deadline. Many believe that the value of the British pound will take a beating if the United Kingdom officially leaves the European Union without a trade agreement in place. This could cause the value of Bitcoin and other cryptocurrencies to surge even higher.
Bitcoin value chart from 2013 to June 22, 2019. Image from Coin360
Bitcoin’s popularity may also be due to an overall growing familiarity with cryptocurrencies. Cryptocurrency is likely to be a hot topic in the 2020 US presidential election. Presidential Candidate Andew Yang has stated that he would like to create clear cryptocurrency regulations. Rep. Eric Swalwell, another 2020 presidential candidate, is even accepting crypto donations for his campaign.
One of the co-founders of blockchain investment firm Kenetic recently predicted that Bitcoin will be worth over $30,000 by the end of 2019. Between Libra, world events, and cultural trends, Bitcoin may reach a new all time high. However, cryptocurrencies are notorious for their instability. All of this news must be taken with a grain of salt.