It seems everyone has both eyes on the world’s biggest cryptocurrency at the moment, and for good reason. Bitcoin is rebounding in leaps and bounds and has now surpassed the $10000 mark much earlier than expected. There are, of course, several factors responsible for Bitcoin’s comeback, including planned deficit moves and greater attention to the technology behind Bitcoin.
By the end of Friday, Eastern Standard Time, Bitcoin was priced at $10,080 which was a threshold many were watching very closely as an indicator as to how strong the bull run would turn out to be. Bitcoin did more than just meet that line, however, and it didn’t take long for it to jump all the way past the $11000 mark. That puts Bitcoin’s growth at more than 13 per cent month to month and more than 7 per cent over the day: growth that is more impressive than almost every other cryptocurrency.
Most experts agree that Bitcoin’s dramatic comeback as of late is due to investor confidence. Trading volume is higher than it has been since last year, and especially within the past day. Trading volume is up more than 12 per cent and has undone much of the sell-off damage that has taken place over the past year. The question, of course, is why confidence in the world’s most popular blockchain asset has made such a comeback.
Looking Past Bitcoin’s Short-term Rebound
At the moment, it looks as if Bitcoin’s comeback will continue its upward climb. Although there are several factors affecting Bitcoin’s success, two areas, in particular, seem likely to make the biggest waves. One is the fact that Bitcoin is planning to halve mining gains and the other is the very real possibility that Facebook’s new crypto will create larger than usual interest in digital assets on the whole.
The halving of mining rewards is not a new thing. Bitcoin reduces the reward amount every few years to create higher demand by manufacturing a supply deficit. The practice of halving mining gains is important for Bitcoin’s health and has helped keep the cryptocurrency at the top spot. Additional interest in blockchain technologies, however, would mean that the planned supply deficit will be greater than what normally occurs.
Libra as a Growth Factor
We have covered Facebook’s cryptocurrency project a few times before and for good reason. As new information surfaces, it means different things for the industry as a whole. A recent white paper from the billions-strong social media platform calls the new digital coin, Libra, and we expect it to be a complete game-changer for cryptocurrencies in general.
At least within the next 6-12 months, until it is released, Libra will bring cryptocurrencies into the forefront of people’s minds who had never even heard of blockchain before. The growth in awareness is guaranteed to give all cryptos a boost. Industry and governments are also jumping on board which is a factor that adds to the growing trust in the technology. Again, a move that will benefit current digital assets. The question that we need to ask at this point is how far the added exposure is going to push Bitcoin prices up, and for how long? At least for now, Bitcoin’s comeback is here to stay.