Bitcoin's Value Passes $11,000 After Libra Announcement

News
By Nathaniel Mott
published

(Image credit: Shutterstock / SPF)

Bitcoin's value surpassed $11,000 per coin on Saturday morning. The cryptocurrency's value has stayed around that $11,000 mark in the hours since, according to the Bitcoin Price Index from Coindesk, which also said the coin's market cap is currently around $193.6 billion as a result of the price bump.

That's a sharp increase from the $7,600 price Bitcoin fetched on June 9. It's hard to attribute the cryptocurrency's value to anything in particular--such is the nature of decentralized money--but many have attributed it at least partly to the Libra cryptocurrency Facebook announced on June 18. Bitcoin and Libra don't have a direct relationship, but pun intended when we say that the cryptocurrencies are in many ways two sides of the same coin.

Libra differs from Bitcoin in that it's a "stablecoin" whose value is supposed to remain fairly consistent. Facebook said that Libra "will be backed by a collection of low-volatility assets, such as bank deposits and short-term government securities in currencies from stable and reputable central banks." The company's goal is essentially to introduce a blockchain-enabled currency that's comparable to traditional currencies many people already use.

Bitcoin differs in that it's not really backed by anything. The cryptocurrency's value is based on what people are willing to pay for it, not some commodities held in a reserve, which is why the price of a single bitcoin can vary so drastically over a relatively short period of time. Buying into Libra is like exchanging a currency; buying into Bitcoin is closer to investing in a volatile stock with the hope of getting a good return on investment later on.

Those approaches can coexist. (As evidenced by, you know, the modern economy.) Libra's announcement could also introduce billions of people to cryptocurrencies, and if they decide they'd rather play a given coin like a stock market rather than simply using Facebook's take on cash, Bitcoin would be the obvious choice. It's possible that some Bitcoin investors think Libra's announcement and release will raise the value of all cryptocurrencies.

Passing the $11,000 mark is probably welcome news for Bitcoin owners either way. The cryptocurrency's value has risen and fell many times over in the last few years. Bitcoin's value peaked around $19,000 in 2017; in recent months it's been closer to $7,000. Peaking at $11,190 over the last 24 hours didn't restore Bitcoin to its former glory, but it showed that at least some of the cryptocurrency market is bullish on its future.

Nathaniel Mott
Nathaniel Mott
Freelance News & Features Writer

Nathaniel Mott is a freelance news and features writer for Tom's Hardware US, covering breaking news, security, and the silliest aspects of the tech industry.

24 Comments Comment from the forums
  • bit_user
    The company's goal is essentially to introduce a blockchain-enabled currency
    From what I've read, Libra is pretty much "blockchain" in name, only.
    Reply
  • blazorthon
    Scams never cease. Companies using crypto-currencies like this are just trying to have greater data collection abilities and control over what you do with your money, practically acting as particularly overbearing banks, but without having to follow many of the rules and regulations that actual banks must follow and without their customers having all the government-backed protections that bank customers have. Make no mistake, this only exacerbates the problems the customers of the banking industry have.

    When a bank gets hacked or runs into problems, you have government insurance to protect you. If anything goes wrong with a transaction or wallet with cryptocurrencies, you have nothing. If someone at Facebook (or even the algorithms they use) decides they don't like you and causes problems for you just trying to have and spend money, there is nothing you can do because they haven't broken any laws. If a simple glitch or hack occurs, you still have nothing. Be careful how you use such financial tools because the downsides far outweigh any upsides. Not even a lawyer can help you when something goes wrong for you.

    We're even expected to believe they will handle private data responsibly? They have done everything they can to profit from your data and Facebook has gone as far as buying customer financial data from credit companies already. Part of their motivation for this is likely to not have to pay for that data anymore because people will give it to them freely by using libra. Even worse, the users of libra don't even see any of the returns on the interest earned by the assests like you do with a real bank account. Bank account interest rates in the US have plummeted to criminally low levels, but they are still positive. With libra, you get nothing, only the big investers get any of the profit.
    Reply
  • velocityg4
    Gamers looking for an upgrade or new build may want to do so sooner rather than later. Before another mining rush and GPU prices double or triple.
    Reply
  • TJ Hooker
    blazorthon said:
    We're even expected to believe they will handle private data responsibly?
    I agree in that I have no faith that the Calibra wallet (developed by the team created/spun off by FB, and will integrate into FB products) will keep your data private. But there will likely be other, open source wallet apps that become available that wouldn't have the same privacy concerns as the calibra wallet.
    Reply
  • bit_user
    velocityg4 said:
    Gamers looking for an upgrade or new build may want to do so sooner rather than later. Before another mining rush and GPU prices double or triple.
    Libra will not be mined by the public.

    In fact, it's not really blockchain-based. The article I linked below describes it as federated database.
    Reply
  • bit_user
    TJ Hooker said:
    there will likely be other, open source wallet apps that become available that wouldn't have the same privacy concerns as the calibra wallet.
    Though Libra is pseudonymous, don't think FB won't try to map Libra IDs to its users' identities, even if it doesn't make use of the explicit identity verification that the wallets will be legally required to do.

    This is worth a read:

    https://hackernoon.com/libra-a-cyberpunk-nightmare-in-the-midst-of-crypto-spring-5543b6f6e34b
    It makes a good point that FB (or its authorized verification processors) can shift their real currency holdings and investments, if they want to flex their muscles.
    Reply
  • velocityg4
    bit_user said:
    Libra will not be mined by the public.

    In fact, it's not really blockchain-based. The article I linked below describes it as federated database.

    I'm referring to the current rise in Bitcoin value the article referred to. Along with the subsequent surge in other crypto's can cause another surge in mining. Assuming it keeps going up.
    Reply
  • bit_user
    velocityg4 said:
    I'm referring to the current rise in Bitcoin value the article referred to. Along with the subsequent surge in other crypto's can cause another surge in mining. Assuming it keeps going up.
    Ah, point taken.

    To be honest, I'm rather puzzled by the sudden rise in other cryptos, unless it's just coincidence and has nothing to do with Libra.

    So, which coins are still profitable to mine with GPUs? Didn't Bitmain or somebody finally build an Ethereum ASIC?
    Reply
  • TJ Hooker
    bit_user said:
    Though Libra is pseudonymous, don't think FB won't try to map Libra IDs to its users' identities, even if it doesn't make use of the explicit identity verification that the wallets will be legally required to do.

    This is worth a read:

    https://hackernoon.com/libra-a-cyberpunk-nightmare-in-the-midst-of-crypto-spring-5543b6f6e34b
    It makes a good point that FB (or its authorized verification processors) can shift their real currency holdings and investments, if they want to flex their muscles.
    I don't see any mention of alternative, open source wallets in that article. It seems to assume that you need to use the official Calibra wallet (which I admit is what I imagine the majority of 'normies' will do). I guess one could still attempt to map your Libra public key/address/ID to your real world identity regardless what wallet you use, but that's true of any public blockchain.

    Can you be a bit more specific about what you're referring to with FB "flexing their muscles"? I skimmed the article (found it kinda long winded to be honest), are you referring to the statement about FB & Co. being better positioned to lobby for policy changes in favor of crypto adoption compared to the Bitcoin community or whatever?
    Reply
  • velocityg4
    bit_user said:
    Ah, point taken.

    To be honest, I'm rather puzzled by the sudden rise in other cryptos, unless it's just coincidence and has nothing to do with Libra.

    So, which coins are still profitable to mine with GPUs? Didn't Bitmain or somebody finally build an Ethereum ASIC?

    Thankfully it doesn't make much sense yet. With cheap electricity $0.10 per kilowatt hour. You'd make about $0.50 per day profit on an Rx 580.

    As prices have been on the rise. The concern would be if Bitcoin prices are set to surge again. As they seem to do every few years after an extended trough. It seems reasonable to assume they could do so again. Once that happens and panic building of new mining rigs occurs. It's too late to get a good price on a GPU or high end PSU.
    Reply