The value of cryptocurrencies has surged seemingly overnight.
Bitcoin’s price has passed the $15,000 mark – a height the coin has not seen since March last year – but there is still a way to go to reach the cryptocurrency’s peak of $26,000 in December 2017.
Smaller cryptocurrencies like Ethereum, Litecoin, and Bitcoin SV (created by Australian Craig Wright) have also seen significant upticks in their value.
Dr Adrian Lee, Senior Lecturer at the University of Technology Sydney Business School, says the announcement of Facebook’s cryptocurrency Libra drove the market rise.
“Because Facebook is trying something, that has caused renewed public interest,” Lee said.
“Now there is a sentiment that in fact crypto’s not dead, even if people said it was after falling from twenty thousand.”
Bitcoin’s price crashed to below $5,000 late last year.
“This is a renewed view of Bitcoin’s potential and I think Libra will only help in making people more willing to trade crypto,” Lee said.
There have also been reports suggesting that India is driving the recent surge as the Indian government considers banning cryptocurrencies.
A draft bill in India has reportedly included penalties of up to a decade in prison for buying and selling cryptocurrencies, with members of a committee discussing that the coins have “features of a Ponzi Scheme”.
Reuters also mentioned growing geopolitical tensions in the Gulf, and the US-China trade war, along with the upcoming date for Bitcoin’s next halving, as potential causes for Bitcoin’s rise.
In just under a year, the reward for mining a single block on the Bitcoin blockchain will halve from 12.5 to 6.25 coins – this is part of the controlled supply measures built into Bitcoin’s protocol that will see the number of new Bitcoins slowly decrease until a total of 21 million have been mined by 2140.
Nearly 18 million Bitcoins are currently in circulation, with a total market cap of $280 billion.
The ASX has a market cap of $2 trillion.