The world’s largest cryptocurrency, Bitcoin, is turning the cryptocurrency story upside down once again. After losing over 3/4th of its valuation during the crypto winter of 2018 and early 2019, the coin has finally picked up the pace. On Wednesday, it reached its 17-month high after breaching the $13,000 mark. Other major digital currencies also experienced gains.
Bitcoin Shaves Off $1,000 in Valuation Quickly
After reaching $13,000, Bitcoin couldn’t continue the rally any longer and slipped by $1,000 after the US markets closed. The price decline can also be attributed to an outage in Coinbase, one of the largest US-based crypto exchanges. The site broke down for a short duration due to high volume, according to a Coinbase spokesperson.
Even after coming back to below $12,000 levels, Bitcoin is up by 35% this week with a 240% increase year-to-date. It is unclear which factors are motivating this steep rally in Bitcoin prices, but analysts believe that excitement over Facebook’s digital currency could be one of the reasons. They also suggest that key technical levels are being broken and that people are looking for safe havens in non-correlated assets like Bitcoin when global trade tensions and war-like situations are rising.
Facebook Is Helping Drive Crypto Prices
In a note to clients, Deutsche Bank’s multi-asset analyst Jim Reid said that the scale of the recent price rise in impressive. A dovish attitude from central banks and Facebook’s entry in the crypto space has also led to renewed interest in digital currencies.
The company announced a new stablecoin backed by government securities last week, dubbed Libra. The coin will be available for billions of Facebook users next year, helping push the wider adoption of digital coins. The social media giant could be using this currency across its suite of apps, including its popular messenger service WhatsApp. The company has already partnered with 27 firms, including Uber, PayPal, Mastercard, Visa, Spotify, and Stripe, to collaborate on the new currency.