There’s no shortage of catalysts behind bitcoin’s weekend rally beyond $11,200. Institutional capital is at long last entering, the bitcoin supply halving event is nearing, and major players including the likes of Fidelity and Bakkt are building much-needed infrastructure.
Considering that the crypto market rally overlapped with Facebook’s Libra development, however, it’s easy to draw the conclusion that the stablecoin fueled the bitcoin rally. Not so fast, says Susquehanna International’s Bart Smith . He is head of digital assets at the firm and was featured on CNBC, saying:
“I don’t think this rise from $[9,000] to [$11,000] is driven in large part by Libra.”
Instead, Smith believes the reasons for the rally were three-pronged comprised of technical signals, bitcoin futures trading $100 above the market price, and miners taking profits to fund operations. Miners wouldn’t reinvest their profits into their machines if they weren’t bullish about bitcoin’s prospects.
“None of that had anything to do with Libra,” said Smith.
As eToro Senior Analyst Mati Greenspan pointed out in a recent article in The Wall Street Journal , while the 2017 bitcoin rally was a function of “overwhelmingly speculative sentiment,” 2019 is different. He added:
“This time it seems much more reflective of true value.”
Facebook’s Libra coin certainly has attracted attention to the space given the company’s roughly 2.2 billion user base. Once mainstream users learn about Libra, they may be more inclined to understand what bitcoin is all about, which can only be bullish for the market – especially once they realize the centralized nature of Facebook’s stablecoin.
CNBC host Joe Kernen has been warming up to bitcoin and noted his interpretation that, “fiat currency is currency for governments, Libra is currency for corporations, [and] only bitcoin is currency for the people.” He struck a chord with the crypto community for pointing out the centralized nature of Libra and saying:
“Who put Facebook in charge of giving currency to the rest of the world?…Why should they be the ones in a position to dictate how digital currency works? Who annointed them? Of all places to anoint, why Facebook with their history? That’d be the last person I would give the keys to.”
The bitcoin price has soared some 250% since its year-end 2018 bottom. And it’s been pointed out on Crypto Twitter that the last time the bitcoin price achieved $10,000, it only took a little more than two weeks for it to hit its $20,000 peak. The bitcoin price is finally responding to good news. If it continues on this trajectory, economist and trader Alex Kruger points out another 250% rise would place BTC at $38,500. Though he notes, “past performance not indicative of future results.”