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

Credit: Shutterstock / SPFCredit: Shutterstock / SPFBitcoin'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.

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  • bit_user
    Quote:
    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.
  • 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.
  • 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.