Bitcoin saw its highest price before December 2017 when the cryptocurrency hit just under $20,000. After a choppy few months for the cryptocurrency, bitcoin has steadily picked up over the past few weeks and hit a 15-month high on Sunday. Experts have since suggested the renewed interest in BTC came from Facebook announcing details of its own cryptocurrency, Libra.
Jehan Chu, co-founder of Kenetic Capital, said the interest in Libra is forcing businesses to focus on cryptocurrencies.
He told CNBC: “The price surge is due to two major factors, one is an increasing consensus among the investment community that bitcoin is a legitimate store of value for the digital age, and two Facebook’s Libra cryptocurrency launch has forced every CEO to take crypto seriously.”
But Head of digital assets at Susquehanna Bart Smith said bitcoin being at its highest level in 15 months is not due to Facebook’s libra but instead due to increased interested in the cryptocurrency.
Speaking to CNBC, the finance expert said: “I don’t think this rise from nine to 11 is driven in large by Libra.”
Mr Smith insisted there were three reasons why people were buying bitcoin last night.
Firstly, he said: “Most of the people that trade bitcoin for-profit trade on technicals and there was a lot of resistance area in the upper $9,000 that got broke and once that broke $9,000 a psychological barrier of $10,000 it shot up.
“Again, when the rallies in bitcoin happen during US business hours, it is almost always led by the futures.
“The futures were trading at 100 over last week and when it got to $9,000 at the beginning of last week, there was a lot of discussion about miners taking profit above $9,000 to fund their operations.
“None of that had anything to do either with Libra.
“So, I think often times we see these headlines, we see the price of bitcoin move and we try to connect the dots where maybe they shouldn’t be connected.”
But Mr Smith has previously been critical of the cryptocurrency and said it is “certainly speculative”
According to CoinDesk’s bitcoin price index, the world’s largest digital currency was at $10,889.37 at 13:30 on Monday.
The price increased after Facebook announced the launch of its own cryptocurrency called Libra to take on the global dominance of bitcoin.
Finance expert Tom Lee believes Facebook’s Libra will help to legitimise cryptocurrencies and give bitcoin further room to increase in value, with the potential for bitcoin to simply become a “reserve currency in crypto” in the future.
The cryptocurrency expert added: “The Facebook announcement is a complete validation that mainstream is now focused on cryptocurrencies.
“I think it really destroys those arguments that say, ‘I believe in blockchain, not bitcoin.’”
Libra will be managed by a large group of companies including Spotify, Uber and Vodafone.
The wallet, which will be available in WhatsApp and Facebook Messenger will eventually be able to pay bills, buy goods or use public transport.