The announcement of Facebook’s cryptocurrency Libra is very much credited for the 2019 bitcoin bull run by many thought leaders in the crypto-finance space.
BlockPublisher got in touch with Danny Scott, CEO of one of UK’s oldest and leading bitcoin exchanges, CoinCorner, as he opined about the causes behind the recent bitcoin price uptick stating:
People are trying to associate the recent price spike with Facebook’s Libra announcement, but I personally believe this has had no impact on the price other than helping to prove bitcoin’s superiority in the cryptocurrency space
Danny pointed to bitcoin’s steady growth and recent bull market a result of the gradual build-up that had been taking place in the bitcoin world for the past 6 months.
You only have to check Google Trends and compare the two to see it’s certainly not Libra driving the increase, just pure supply and demand with natural growth
Facebook‘s announcement of its native cryptocurrency, Libra, has sent ripples of crypto-hype across all media. A company as big as Facebook, which has a user base of over two billion, supporting a crypto project is a testimony to the revolutionary capabilities carried by the nascent technology of blockchain.
After hitting lows of around $3,200 back in December 2018, we have seen a slow and steady build over the last 6 months which coincides perfectly with our customer registrations and trade volume increases.
Over the past six months, bitcoin world had been seeing some steady growth on both technological and legislative fronts. Adoption of bitcoin and blockchain technology, in particular, has been on the rise lately.
As pointed out by Danny Scott, there had been a steady increase in customer registrations at their exchange and a steady trading volume rise. The more the demand for an asset, the more its price is based on the simple market principle of supply-and-demand. Danny further added:
Although Facebook’s cryptocurrency is not a “genuine cryptocurrency” as it has its ties with fiat world being a stablecoin, it has exposed the world of bitcoin and blockchain to a wide audience globally. Bitcoin has gotten its fair share of exposure owing to Libra’s announcement worldwide.
Seeing companies like Facebook adopting blockchain has now consolidated a more positive image of bitcoin and crypto world in the eyes of institutions and general public. Although bitcoin is dismissed as something that has largely been used for illegal activities and has been too uncertain to invest in, Libra’s announcement made its image more credible.
Many are thus associating the recent bitcoin bull-behavior to this announcement as media hype plays a significant role in building a positive sentiment around the asset. Since bitcoin’s price is based on speculation with no physical backing, a positive hype certainly does play a big role in pushing the digital asset’s price up. Besides, Libra is just another stablecoin which enhances bitcoin’s status as a pure cryptocurrency to believe in.
But despite the possibilities, the rise in bitcoin’s price was due even before the announcement, as Danny stated. Use-cases of blockchain tech are being found in almost every industry. Companies like Target, BMW, Pepsi, Walmart and Microsoft are already experimenting with this tech.
Microsoft even launched an identity tool on the bitcoin blockchain. All of this has led to increased bitcoin adoption and acceptability worldwide. So, as per Danny, the recent spike in bitcoin should be credited more to its natural growth than to an announcement of a stablecoin made by social media giant Facebook.