On Monday, the price of the world’s best-known cryptocurrency hit levels not seen since the spring of 2018. A 15-month high is exciting, but is there real momentum behind this latest rise, or is it just another false run?
Key takeaways:
- Bitcoin price over $11,000
- Highest level since March 5th, 2018
- Rises of up to 180%
- Confidence from Facebook’s new cryptocurrency, the Libra, is said to be part of the surge
- Wild swings show faith has not been restored fully
Facebook’s Libra has gotten a lot of attention recently, and the markets have responded positively to some of the most prominent players in the financial markets backing the new cryptocurrency. On Monday 24th, prices hit a max of $10,853, a slight drop from last week’s 15 month high. Prices have been volatile over the last week, seeing 5 to 10 percent swings daily.
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New Investor Confidence
The crash of 2018 many upset investors, who somehow imagined the bubble would never burst. But burst it did and after hitting the record highs of $19,340. Other news outlets, like Cointelegraph, are predicting that the investor confidence will continue and this is not another “false run.” Others are more skeptical.
$10,000 benchmark passed
Markets like benchmarks. The FTSE had 7000 for years – it’s like the threshold that traders look for to signal that a market has enough confidence to continue rising, but in reality, they are meaningless. The threshold of $10,000 does indicate that confidence is there, but it does not show how well supported the rises will be.
Bitcoin Gaining Legitimacy
Bitcoin was seen as a fad, but its continued existence and popularity as a non-fiat currency (download) has shown that there is an enduring appeal of a distributed ledger form of money. Trading volumes are up; investor interest is up
Facebook faces Criticism
Facebook’s share price has enjoyed a boost in share price since the announcement of their new cryptocurrency, but the choruses of disapproval and concern from human rights advocacy groups, privacy advocates, politicians and other businesses, who argue that the company’s dismal record of protecting the privacy and rights of their customers means they should be very strictly regulated. The cavalier, even contemptuous attitude Facebook has shown governments and regulators should be of concern to long-term investors, but it has not stopped giants like JP Morgan from stepping in and investing in the new technologies. The confidence is there, or so it seems
Will the Rise Continue?
Many investors lost an enormous amount of money in the last crash. They will be pleased to see higher prices. This time around, it looks like things will be different. A lot of the hyped coins have fallen by the wayside, and we are left with viable looking technologies, like Ethereum, BAT, and Ripple. Now it is easier to see the real applications of blockchain; investment should be less volatile this time around. However, it is impossible to say how high it will reach.
