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Facebook, Binance, Chinese Yuan Combine to Boost Bitcoin above $9000

Last Updated March 4, 2021 2:36 PM
Yashu Gola
Last Updated March 4, 2021 2:36 PM

By CCN.com: The price of bitcoin (BTC) on Sunday surged above $9,300 to establish a fresh year-to-date high.

The bitcoin-to-dollar exchange rate touched $9,388 at 0600 UTC — its highest since May 30 — on San Francisco-based cryptocurrency exchange Coinbase. The move brought the pair’s net rebound gains close to 200-percent, including a 154-percent since 2019 open alone. It further prompted bitcoin’s market capitalization to jump above $165 billion. At its highest, the cryptocurrency’s net valuation was more than $327 billion.

bitcoin price
Bitcoin Price Has Surged 7% in Last 24 Hours | Source: TradingView.com, Coinbase

The steady uptrend in the bitcoin market has coincided with notable volume growth. According to CoinMarketCap’s 24-hour adjusted timeframe, exchanges have hosted about $23.156 billion worth of BTC-enabled trading activities. Meanwhile, the top cryptocurrency trading platforms known to offer “real” transactional data have witnessed about $1.5 billion worth of BTC volume.

At the same time, the bitcoin dominance rate has surged to its 1-month peak of 57.7-percent, now up 2.7-percent from Friday.

Binance US Closure, Facebook

The inexplainable bitcoin price rally has prompted analysts to look for its potential drivers. Many believe that the decision of Binance, the world’s largest cryptocurrency exchange, to stop providing services to US-based traders is what that is causing the bitcoin price boom. The exchange’s very own native asset, Binance Coin, or BNB, today depreciated by more than 6.5-percent against BTC, extending its losses to 22-percent since June 13.

“Pay attention as increased Bitcoin dominance, specifically over 60%, is bullish for BTC holders but isn’t good for most altcoins,” said  Josh Rager, an independent market analyst. “With US Binance ban & other exchange delistings, people could be moving into BTC & major market cap coins.”

Meanwhile, others believe Facebook’s upcoming payment cryptocurrency, the so-called Libra, is behind the bitcoin price uptrend. Barry Silbert, the founder, and chief executive of Digital Currency Group, called Libra a “catalyst” that would allow people to learn and adopt digital assets en masse, specifically BTC.

“[Facebook coin] will be remembered as just as important — and transformative — as the launch of the Netscape browser,” he added .

Silbert’s opinion did not sit well with Peter Schiff, a prominent US stockbroker. The gold bull said last week that he considers Facebook’s Libra project “bad news for bitcoin.”

“Facebook,” he said , “will target the very market Bitcoin is counting on for growth, the unbanked in nations with high inflation. Libra will be stable, and much easier and cheaper to use as a medium of exchange than Bitcoin.”

Chinese Yuan against Bitcoin

Whether or not it is relevant, but bitcoin also appears to be reacting to the Chinese Yuan’s depressive performance against the US dollar in the last 30 days.

Chris Burniske, a partner at New York-based venture capitalist firm, Placeholder, found evidence of a strong correlation between the bitcoin appreciation and the yuan devaluation. In 2016, for instance, BTC became one of the biggest gainers in the yuan-enabled markets as investors bought the decentralized cryptocurrency to get around state-imposed capital controls.

bitcoin, yuan
Bitcoin Price Historically Appreciated ahead of Yuan Devaluation | Source: Chris Burniske, ARK Investment Management

“The US’s trade war with China, China’s tightening of capital controls to limit funds fleeing the country, and a weakening yuan all added fuel to $BTC’s fire,” said Burniske. “Interestingly then, we have bitcoin satiating appetite for risk in the West and much of the world, while simultaneously serving as a risk-off hedge in China.”

Bitcoin, at the time of this writing, was trading at $9,199.

Click here for a real-time BTC price chart.