Facebook’s Libra, US China trade war and dipping interest rates have brewed the perfect storm for Bitcoin to thrive
- Bitcoin just hit an 18-month high reaching $13,876 after rising for eight consecutive days.
- The announcement of Facebook’s Libra project combined with geopolitical tensions has investors rushing to diversify their funds.
- While some analysts predict bitcoin’s next bull run to take it to at least $50,000 by the end of the year, other speculate that bitcoin’s value will dive back down.
Experts told the Business Standard that geopolitical tensions combined with the announcement of Facebook’s own cryptocurrency, Libra, has sparked fresh interest in investors.
For the last eight days, the value of Bitcoin has continuously risen culminating into a 260% increase so far this year. In the last 24 hours alone, Bitcoin’s value has increased by 16%.
While Bitcoin’s value may be far from its previous all-time high — $20,000 in December 2017 — it’s still the first time that this cryptocurrency has hit the five-figure mark in over a year. It is also at its highest since January 2018.
To be or not to be
Experts are divided over whether the Bitcoin boom is here to stay. Whitney Tilson, founder of Empire Financial Research, told Bloomberg, “Make my words: A year from now, it will be a lot lower.”
Naeem Aslam, ThinkMarket chief market analyst and the man who forecast that Bitcoin would reach $10,000 in a couple weeks on June 17, has a different opinion.
In a Fox Business interview, he predicted that Bitcoin could reach anywhere between $60,000 to $100,000 during its next bull run. According to him, it could hover between $20,000 and $50,000.
Even Simon Peters, an analyst with eToro, asserts that Bitcoin has the potential to hit $50,000 or $100,000 by the end of the year.
The perfect storm
Investors are looking to diversify their funds thanks to the current geopolitical climate. On one hand is the ensuing US-China trade war, with unrest in the Middle East on another.
Jim Reid, a Deutsche Bank executive, speculates that interest rate cuts by central banks may also be a contributing factor.
Talking to CNBC, Reid stated, “If central banks are going to be this aggressive, then alternative currencies do start to become a bit more attractive,” speaking about the potential interest rate proposed by the Federal Reserve’s chairman, Jerom Powell.
Bitcoin is a way for investors to park their funds in the leading cryptocurrency — as an alternate.
Since Facebook published its white paper on its upcoming cryptocurrency, Libra, on June 18, the value of Bitcoin rose more than 30% from $9,000.