Less than three days after Facebook announced its Libra cryptocurrency, Bitcoin, the world’s first and largest crypto has seen an unprecedented price increase at least for this year.
In the last 10 hours, Bitcoin prices across major exchanges have averaged around $9,300 to $9400 per Bitcoin. This is a performance that has now put the digital currency as the most performing asset when compared to any bluechip stock on the Nasdaq, NYSE or even the LSE.
On a year to date basis, Bitcoin has now appreciated by about 151%, However, Bitcoin is still down by about 50% from its all-time high price when it clocked $20,000 before a major crash in price.
While there were fears that the recent rise in Bitcoin price was momentary due to low volume levels across major exchanges. It is now very clear that the number one driver in the price of Bitcoin was the announcement of Facebook Inc’s Libra digital currency that is planned to launch by 2020 half year.
There were fears from some section of the digital currency community that Libra could signal a decline or even the death of Bitcoin as the most dominant crypto asset. However, the latest turn of fortunes for BTC means the markets feel Bitcoin has more to gain should Libra finally hits the markets.
First is that the Libra project is backed by not only Facebook but elite groups of tech giants and research companies such as Mastercard Inc, Visa Inc, Spotify Technology SA, PayPal Holdings Inc, eBay Inc, Uber Technologies Inc and Vodafone Group Plc- whose participation in the project means the interest in digital currency generally is even more positive than ever. Facebook said it plans to increase the membership of the Libra Association to about 100 by next year.
What no one is even seeing is that should Libra gets listed on any major exchanges such as Coinbase, it could cause an unprecedented rise in the prices of major cryptos starting with Bitcoin, Ether (the digital token of Ethereum) and even LiteCoin because current holders of these existing tokens could simply use the Libra stablecoin as a hedging tool to up their exposure to Bitcoin and other digital currencies.
However, should Libra gets knocked down by regulators and sovereign authorities, a scenario which is not very certain, Bitcoin could also gain very much because its superiority could remain unchallenged.