The value of Bitcoin has surged above $11,000 (£8,600), which is the highest level in 15 months, after a renewed hype over cryptocurrencies after Facebook said it was planning to launch a cryptocurrency next year.
Bitcoin has risen in value by almost $2,000 in the week since the US technology firm, Facebook decided to venture in the cryptocurrency market in a move that could alter the financial landscape with far-reaching implications for governments and central banks around the world.
The cryptocurrency had languished below $6,000 for much of this year and was falling out of the limelight as investors around the world gradually lost interest in the fad for digital assets.
Some investors had been severely injured by bitcoin when its meteoric rise to almost $20,000 in late 2017 – was followed by a spectacular collapse last year. Stoking fresh fears of the reinflation of the bubble, bitcoin hit $11,116.65 over the weekend, up from $8,539.81 at the start of June, before dropping back slightly to trade at about $10,800 on Monday afternoon.
Analysts said the news of Facebook’s work on Libra was the sole push behind the rise, as traders wager that the adoption of cryptocurrency technology by a major global corporation would help regulate and legalize the industry.
Craig Erlam, a senior market analyst at the financial trading firm Oanda, said: “Bitcoin has slowly – by its own standards – been rising in recent months but the launch of Facebook’s Libra has clearly been a catalyst for the recent surge.
“The publicity that the launch has once again brought to space, combined with the legitimacy it offers, has understandably excited the community.”
Rising tensions in the Middle East and mounting fears about the world economy have also stoked renewed interest among investors in bitcoin, which is sometimes viewed as a safe-haven asset similar to gold. The digital currency does not typically mirror the movements in wider financial markets during periods of turmoil.