Why has Bitcoin soared to over 11,000
Bitcoin soaring continues: Price rises above $ 11,000
Frankfurt - Driven by Facebook's plans for its own digital currency, most cryptocurrencies are continuing their latest rally. Bitcoin, the oldest and best-known digital currency, passed the $ 11,000 mark on Saturday for the first time since March 2018, after having risen above the $ 10,000 hurdle for the first time in a long time just a few hours earlier.
Some experts like Timo Emden from Emden Research are warning of the increasing dangers of a price crash after the recent soaring. But there is also further price potential. "In view of such a dynamic recovery of the five-digit price level, the crypto thaler should not only attract speculators, but also increasingly call institutional addresses on the scene," wrote Emden in a market commentary on Saturday. "A not insignificant number of investors are simply afraid of missing out on something. The bull market feeds the bull market."
Emden warned against excessive euphoria, many investors are currently ignoring the risks. "The price rally seems to cloud the senses. The current price fantasies of the market participants are causing high volatility in the market. Profit-taking and the resulting strong setbacks are possible at any time."
In the slipstream of the Bitcoin soaring, other crypto currencies such as Ether and Bitcoin Cash also continued to grow. The total value of all around 2,270 cryptocurrencies was most recently around 330 billion dollars, around ten percent more than on Friday evening. That is also about three times as much as in mid-December 2018, but still almost half a trillion dollars less than at the peak at the end of 2017. "The mainstream interest in cryptocurrencies is currently huge," said Emden.
The situation is somewhat reminiscent of the summer and autumn of 2017 when Bitcoin had jumped one thousand mark after the next and rose from $ 2,000 to $ 20,000 within a few months. "Investors are currently having a déjà vu experience. It seems like history will repeat itself," said Emden. "After jumping over $ 10,000, the 'big money' is now flowing into the market, which could quickly push the price into even higher dimensions. On the other side, there is now a threat of spectacular crashes."
Bitcoin, along with other cryptocurrencies, benefits above all from the increasing interest of large investors and companies in digital currencies. On the one hand, there are repeated reports that larger investment houses want to enable their customers to trade digital currencies. This includes one of the largest asset managers in the world, Fidelity.
In addition, there is the great potential that is currently seen in the crypto currency planned by Facebook called "Libra". This week, the social network with 2.3 billion user accounts had presented concrete plans. However, the differences to existing cryptocurrencies, especially to the "veteran" Bitcoin, are great. The analysts at BayernLB, for example, are of the opinion that Libra is basically not a new cryptocurrency, but rather comes closer to a payment system like PayPal.
Despite the sometimes considerable differences in the concepts, existing digital currencies also benefit from Facebook's plans - since then the Bitcoin rate has increased by around a quarter. Since the interim low in December, Bitcoin has even risen by a little more than 250 percent. However, the record high of around $ 20,000 reached at the end of 2017 is significantly higher. The violent crash that followed was due, among other things, to regulatory efforts by many countries. (APA, dpa, June 22, 2019)
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