Bitcoin passes $11,000 on news of Facebook's cryptocurrency plan - The Guardian

Posted: 24 Jun 2019 09:11 AM PDT

The price of bitcoin has surged above $11,000 (£8,600), its highest level in 15 months, amid renewed hype over cryptocurrencies after Facebook said it was planning to launch a digital currency next year.

Bitcoin has risen in value by almost $2,000 in the week since the US technology firm revealed plans to create a cryptocurrency called Libra, in a move that could radically reshape the financial landscape with far-reaching implications for governments and central banks around the world.

The original cryptocurrency had languished below $6,000 for much of this year and was falling out of the headlines as investors around the world gradually lost interest in the fad for digital assets.

Some investors had been severely burned by bitcoin when its meteoric rise to almost $20,000 in late 2017 – which drew comparisons to the tulip mania of the 17th century – was followed by a spectacular collapse last year.

Stoking fresh fears of the reinflation of the bubble, bitcoin hit $11,116.65 over the weekend, up from $8,539.81 at the start of June, before dropping back slightly to trade at about $10,800 on Monday afternoon.

Analysts said the news of Facebook's work on Libra was the prime driver behind the surge, as traders bet the adoption of cryptocurrency technology by a major global corporation would help legitimise the industry.

Craig Erlam, a senior market analyst at the financial trading firm Oanda, said: "Bitcoin has slowly – by its own standards – been rising in recent months but the launch of Facebook's Libra has clearly been a catalyst for the recent surge.

"The publicity that the launch has once again brought to the space, combined with the legitimacy it offers, has understandably excited the community."

Rising tensions in the Middle East and mounting fears about the world economy have also stoked renewed interest among investors in bitcoin, which is sometimes viewed as a safe-haven asset similar to gold. The digital currency does not typically mirror the movements in wider financial markets during periods of turmoil.

Gold prices have risen in recent weeks to the highest levels since 2013, as the US Federal Reserve could be forced into interest rate cuts to stave off a slowdown in the US economy. The European Central Bank has also said it could cut interest rates as growth falters in the eurozone.

bitcoin price since 2015

Unlike its run in 2017, which came largely from media hype stoking retail investors' interest in cryptocurrencies, bitcoin's tripling in value this year could have been the result of increased demand from professional investors such as fund managers and hedge funds.

The Chicago Mercantile Exchange last week recorded an all-time high volume of trading in bitcoin derivatives contracts – sophisticated investments tracking the price of the digital currency only available to City banks and fund managers – with more than 5,000 contracts worth $250m.

However regulators around the world have warned that Facebook's entry into the world of cryptocurrencies could lead to greater controls and tougher regulations to protect consumers.

Mark Carney, the governor of the Bank of England, gave a cautious welcome to Libra last week. He said the central bank would support new entrants into the UK financial system, but warned that Facebook would need to meet the highest regulatory standards.

"The Bank of England approaches Libra with an open mind but not an open door," he said.

At the weekend the Bank for International Settlements warned that big tech firms using digital currencies could undermine the stability of a banking system that had only just recovered from the crash of 2008.

Analysts at the Swiss bank UBS said: "We continue to view speculation in specific cryptocurrencies as a gamble and not an investment. Investors interested in next-generation payment systems should consider [other] emerging opportunities."

Bitcoin: What next for the cryptocurrency as price passes $10,000? - The Independent

Posted: 24 Jun 2019 04:06 AM PDT

Nearly two years after passing $10,000 for the first time, bitcoin has once again returned above the price milestone.

In the intervening time, bitcoin's value has swung between highs close to $20,000 and lows south of $4,000, as volatility has come to characterise the cryptocurrency.

It has made predicting bitcoin's next move notoriously difficult, though six months of near constant gains have led some market analysts to forecast that its price may still be yet to reach its full potential.

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"The bounce back of bitcoin has been fairly extraordinary, having been at $3,200 not even six months ago," George McDonaugh, CEO of cryptocurrency and blockchain investment firm KR1, told The Independent.

"Those that thought bitcoin was a passing fad will raise an eyebrow as it passes $10,000... and I expect prices to surge after this mental marker is reached. Many will decide, as thousands do everyday, to buy some and see what happens."

Bitcoin and other major cryptocurrencies like ether and ripple have remained relatively stable since passing the price point over the weekend, as investors wait to see whether momentum will continue in a positive direction.

For this to happen, interest from casual investors will need to pick up to a level similar to that seen in November 2017.

When bitcoin first passed $10,000, its seemingly perpetual price rise sparked a huge flurry of investments as people sought to make a quick profit.

A good way of judging this interest is through the number of online searches about bitcoin. Despite an uptick in searches across Google in recent weeks, it still remains at a fraction to what it was in late 2017.

Should this happen, the fear of missing out for a second time could trigger an even greater wave of investments in the cryptocurrency.

"Many traders will be looking to take some profits off the table now," Glen Goodman, author of The Crypto Trader, told The Independent.

"But it's worth remembering that last time bitcoin's price broke through $10,000 it then hit it's all time high of nearly $20,000 just 16 days later."

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