Bitcoin Price Hits $11,300, Up 170% This Year

On Monday, Bitcoin, the world’s largest cryptocurrency hit a high of $11,307.69 at HK/SIN, around 5:30 a.m, according to Coindesk’s Bitcoin Price Index.

This 170 percent jump is the highest since March 5, 2018.

The catalyst is said to be Libra, the upcoming high-profile cryptocurrency from Facebook that brought all cryptocurrencies into investor focus because of the rising media spotlight.

In the afternoon of Monday, Bitcoin, after a small scale back of prices traded at $10,917.

Facebook increased awareness

Bitcoin’s price bump is credited to the surging awareness about the digital asset class after Facebook hyped its ambitious cryptocurrency plan last week.

Obviously, the 2 billion users of the social media took note of it.

“It’s clearly a positive for bitcoin,” commented Bart Smith, head of Susquehanna’s digital asset group.

In his words, “if 2 billion users are on Facebook, some percentage of them start to kind of look at Libra and try to understand how it is different and similar to bitcoin — that is positive.”

Facebook announced that its cryptocurrency project Libra will be run by a Swiss non-profit called the Libra Association. Expected to be launched in 2020, Libra will be controlled by a consortium in which Facebook will have partners such as Uber, Mastercard, Stripe, Visa, Spotify, and PayPal.

Breaching technical level and safe haven buying

Bart Smith sees the huge jump in Bitcoin price on Monday having more to do with the breaching of the technical barrier.

That “psychological barrier” of $10,000 has been broken and bitcoin “shot up”, Smith observed.

“There was a lot of resistance area in the upper $9,000s and that got broken,” Smith explained.

Many market watchers are also attributing bitcoin’s rally to safe-haven buying. Obviously, Bitcoin is not in everyday use as a payment tool because of the high volatility and transaction cost.

Circle CEO Jeremy Allaire agrees that Facebook’s entry hastened expectations of mainstream traction about cryptocurrency, added brand recognition to blockchain and expanded acceptability rate among retail and institutional investors.

Libra enhanced anticipation that next generation of blockchains will be a massive mainstream phenomenon, Allaire added.

“There’s a broader understanding of crypto as an asset class,” Allaire told CNBC.

Allaire observes that many investors see bitcoin at par with gold which is noted for its limited and predictable supply. Gold hit a six-year high Monday. For most investors, Bitcoin is “digital gold.”

The timing of Bitcoin’s 190 percent rebound in 2019 from the 73 percent plunge in 2018 is coinciding with the U.S.-China trade war and rising tensions with Iran.

“As a safe-haven asset, they have a lot of similarities,” Allaire said.

As understood, Bitcoins are the digital equivalent of cash and in that context, a Bitcoin wallet is similar to a physical wallet. In the latter, information pertaining to Bitcoin is stored with a secure private key that can access Bitcoin addresses for conducting transactions. The desktop, mobile, web and hardware are the main types of bitcoin wallet.

Meanwhile, the U.S. House Financial Services Committee will hold a hearing on Facebook’s libra cryptocurrency on July 17.

Announcing this, Maxine Waters, chair of the House committee urged Facebook to suspend the project.

Waters told CNBC that “we have to protect our consumers and can’t allow them to go to Switzerland with all of its associates and begin to compete with the dollar.”

The Senate Banking Committee will also hold a separate hearing on July 16. The Facebook stock was up 0.76 percent on Monday.