Bitcoin price has surged this week to a fresh year-to-date high at the back of Facebook announcing that it is creating its own digital currency and payment network. BTC price is currently closing on the psychological mark of $10,000 per coin.
In the last trading session, Bitcoin gained around 7% to $9,766 on the Bitstamp Exchange. Since the beginning of the year, Bitcoin has gained close to 160%, taking the coin to a new year-to-date high.
Facebook’s Announcement Fuels the Rally
The surge in BTC is a result of a number of factors, but it did greatly benefit from Facebook’s announcement of its Libra cryptocurrency, which is a sign that crypto is returning to the mainstream. There are currently hot discussions regarding Libra even though it won’t launch immediately. According to Google Trends data in May, the searches for Bitcoin reached a new 12-month-high following speculation about Facebook’s plan to introduce its own crypto.
In a tweet, eToro analyst Mati Greenspan indicated that BTC price is being driven higher by fundamentals such as additional monetary facilitation from central banks, institutional adoption of cryptocurrency, and the anticipated Bitcoin halving.
BTC Benefiting from Institutional Adoption
There is increased institutional cryptocurrency adoption with institutions such as Fidelity Investments and cryptocurrency platform Bakkt expected to start using BTC. Bakkt, a Bitcoin futures exchange, is expected to be trialed next month. The adoption of Bitcoin by one of the leading global asset managers is seen as a bullish development in the industry.
The anticipated BTC halving in 2020 will likely tighten the amount of available Bitcoin and this, coupled with growing institutional demand, will result in a supply shock, which bulls are already excited about.
Bitcoin price could also benefit from the move by the Fed to cut interest rates as from next month to increase growth.
Featured image: DepositPhotos © kentoh
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