What happened to Bitcoin?
Many cryptocurrencies have had incredible runs in the past 3 months. The most well-known one – Bitcoin has almost tripled its value in this period and does not seem to be giving away any momentum as of yet, as it continues to grow exponentially, rising by about 40% in the last 2 weeks alone. Many say at least part of the reason could be attributed to the Facebook’s Libra announcement, however, is that actually true and how does Libra actually affect cryptocurrencies such as Bitcoin?
Why is this important?
In general:
Hovering over $11,000, Bitcoin is trading at more than 50% of its highest value of Dec 2017. Some well-known investorsWhat are value stocks? A value company is a company that app… More predict Bitcoin at $100,000 within the next year, however, others say it’s already overvalued and is destined for a steep correctionA correction is a temporary price movement in the opposite d… More. In the face of the Libra announcement, is this the beginning of a monumental run or has another bubble just formed?
For investors:
In our recent article, we have discussed Libra, the newly announced Facebook currencyWhat is currency? Currencies are the generally accepted medi… More, which is set to launch in the first half of 2020. Many met the news with big enthusiasm, as Facebook sharesWhat are value stocks? A value company is a company that app… More climbed, and cryptocurrencies followed suit. The expectation is that the new Facebook currency will make cryptocurrencies more popular and widespread.
However, the cryptocurrency markets were very slow to react to the news, as there was a muted reaction immediately after the announcement. Moreover, is Libra actually a cryptocurrency? For one, a key idea of cryptocurrencies is that they are decentralized, whereas Libra will be fully powered and controlled by one corporation. Also, Facebook has announced that Libra would have a value of around 1 USD, and it would be pegged to a basket of currencies. What that means is that there will be muted volatilityWhat is price volatility? Volatility is the price fluctuatio… More on the priceWhat are value stocks? A value company is a company that app… More of Libra, unlike cryptocurrencies, which are completely free floating and extremely volatile. So, Libra will not be your typical cryptocurrency. That said, it can still shed some light on and propel alternative payment methods, cryptocurrencies being one of them.
Another thing to consider is that Facebook is not planning to launch Libra in developed countries first, as their target marketWhat are value stocks? A value company is a company that app… More will be users who do not have access to the most primitive financial services such as a bank account. That means that users in less developed countries will need to be educated about the new currency Libra before they can start to consider using other similar means of payments, such as cryptocurrencies. So, the big issue is timing. No one knows how much time it will take for Libra to become popular among developing countries, let alone be successful at all. So, it’s probably best not to base your crypto investmentInvestment is the commitment of money or capital to purchase… More decision solely on the prospect of Libra.
For traders:
Bitcoin priceWhat is price? The price is the measure of the value of good… More in USD is currently trading at almost 60% of its all-time high, which was close to $19,000 back in December 2017. The price is nearing the closest resistanceWhat are “resistance” levels in trading? A resistance level … More level of about $11,750. The nearest significant supportWhat are “support levels” in trading? A support level is a… More is at around $8,000.
Read more at: https://news.tradimo.com/libras-impact-on-bitcoin-btc-and-cryptocurrencies/
