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Bitcoin is above $9,000. Time for some Vegeta memes.
The #1 cryptocurrency by market cap has been on fire recently, crawling up and up despite the barriage of typical media FUD. Over the last month, the bitcoin price is up from $7,140 to $9,280, an increase of 30 percent. Last week it briefly touched $9,000 only to drop back down, but today the price appears to have settled comfortably on the upper side. But what’s behind this confident climb—and does Facebook have anything to do with it?
The most interesting thing to look at is the level of volume in the crypto market. While bitcoin may be half the price it reached at its peak in December, 2017, volumes are actually higher now than they were then. In early May, bitcoin trading volumes broke $30 billion, according to CoinMarketCap, and they have since settled to around $20 billion.
That shows renewed interest in bitcoin, even amidst criticism that no one’s using it. But why?
A serious possibility is that investors are working themselves up about the upcoming Facebook coin. While few diehard bitcoiners are warming to the proprietary stablecoin, many are ecstatic about its network effect. Facebook, WhatsApp and Instagram have a combined audience of 2.6 billion people. And if Facebook pushes its crypto to them, that could open their minds to the bigger ecosystem.
One of the biggest barriers to investment in the crypto space, and a particular bugbear in general, is the lack of crypto-friendly regulation in the U.S. Facebook, with its army of lobbyists and top-tier lawyers could help to speed things up—something that would benefit the crypto space as a whole, and speed up adoption.
There are other, unrelated reasons why bitcoin has been rising. China has been getting into bitcoin as a hedge against U.S. trade tariffs, though this is hard to pin down. It’s interesting to note that Russia is considering an offshore crypto-trading exchange on the Chinese border—a move that suggests the cryptocurrency may be used as a means for both countries to evade sanctions, or something equally nefarious.
And of course, there could be the usual skeptical theories. Large amounts of Tether are being printed on a weekly basis. That could be due to increased demand for Tether (even though many exchanges are now offering other stablecoins) or more evidence that there might be something fishy going on. Tether floods often precede price spikes, with explanations ranging from wash trading to other forms of price manipulation.
But for now, enjoy the memes.