In Depth

Bitcoin price: did Facebook Libra drive cryptocurrency beyond $11,000 mark?

Experts are divided over whether the online giant’s new digital coin is bolstering the market

Bitcoin prices have reached their highest value in 15 months. Experts claim that news of Facebook’s new Libra coin, which was unveiled last week, has renewed investor interest in cryptocurrencies.

The original virtual coin leapt past the $11,000 (£8,620) mark on Saturday, according to the ranking site CoinMarketCap. The leap is the cryptocurrency’s highest value since March 2018.

After a weekend of continuous price hikes, bitcoin values now rest at $11,355 (£8,900) as of 11:30am UK time, the ranking site reports.

It’s understood that Facebook’s foray into bitcoin territory last Tuesday has been a key driver in the cryptocurrency’s seemingly-unstoppable bull run. 

According to The Guardian, digital currency traders believe that Facebook’s Libra, which aims to provide seamless money transfers through the firm’s chat apps, will be a vital step in legitimising the industry. 

Craig Erlam, a senior market analyst at the American trading firm Oanda, told the newspaper that bitcoin had been slowly rising in recent months but the launch of Facebook’s Libra had been “a catalyst for the recent surge.”

Is Facebook the sole reason for the bitcoin boom?

That’s a matter of debate. While Erlam claims that Libra has been a catalyst for the surge, other experts believe there are multiple factors behind the ongoing bull run. 

In an interview with the American broadcaster CNBC, Bart Smith, head of digital at the trading platform Susquehanna, argued that the main driver that sparked bitcoin’s price hike was when values surpassed the $10,000 (£7,850) mark on Friday.

Once the psychological barrier had been broke, values “shot up” at a faster rate than they did following the announcement of Libra, he said. 

Smith believes that Libra is a positive step for bitcoin. It has the potential to engage two billion Facebook users with the world of cryptocurrencies, he says. 

The analyst told CNBC that a percentage of Facebook users may be tempted to look at Libra and try to understand how it is different and similar to bitcoin.

How are bitcoin’s rivals faring?

When bitcoin’s values start climbing, the cryptocurrency’s rivals typically follow suit.

Ethereum, which is the second largest cryptocurrency behind bitcoin, gradually rose from a low of $269 (£211) on Friday to today’s value of $313 (£246), according to CoinMarketCap

Meanwhile, values in the banking-focused virtual coin Ripple, which is ranked third, rocketed over the weekend.

Prices were recorded at a low of $0.43 (£0.34) on Friday, before leaping to a high of $0.49 (£0.38) the following day, says the ranking site. Values have slowly declined since, though, with prices coming in at $0.47 (£0.37) today.

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