Bitcoin surged past the $9,000 mark recently and it may not be long before the $10,000 mark is reached. Part of the reason for the latest surge is the news that Facebook is set to unveil their own digital currency, and the news that some people in Hong Kong are pulling money out of banks and looking for other options, including Bitcoin. Let’s look at the Facebook and Hong Kong news and how it has affected the price of Bitcoin.
Facebook Set to Unveil Libra
It is expected that Facebook will announced their plans for Libra, their own digital currency this week. Facebook has reportedly gotten backing from a lot of big name companies for their new cryptocurrency including Visa and MasterCard. The price of Bitcoin has surged with the Facebook news, as many people are taking this as a positive for cryptocurrency in general. They are thinking that if Facebook is getting into cryptocurrency then it must mean that it is going to be widely accepted around the world. The price of Bitcoin is now approaching the psychological $10,000 mark that many people believe will be the catalyst for a huge surge in the Bitcoin price, similar to what happened two years ago when the price hit $20,000. Keep in mind that one advantage that Bitcoin has over Libra is that Bitcoin isn’t controlled by any central authority, while Libra will be controlled by Facebook.
Bitcoin a Safe Haven for People in Hong Kong
If you haven’t followed the latest news in China you may not be aware that many people are upset about an extradition bill that the Hong Kong government introduced recently. People in Hong Kong are completely against the bill that would give power to the government to deport people suspected of crimes to mainland China. Massive demonstrations in Hong Kong took place over several days and the government and businesses became concerned. The United States event went as far to issue a statement saying that “the amendments could damage Hong Kong’s business environment and subject our citizens residing in or visiting Hong Kong to China’s capricious judicial system.”
All of the unrest has caused some of the rich people in Hong Kong to consider moving their wealth elsewhere. One of the places they are looking at is Bitcoin. Many of the middle class people in Hong Kong have started to withdraw their money from banks in protest to the bill. The authorities in Hong Kong gave in a little bit to the pressure and suspended the extradition bill, but protestors were not satisfied, as they had another demonstration on Sunday. There has been an uptick in Bitcoin trading and some people are pointing to what is going on in Hong Kong as one of the reasons.
Some people in China have started to realize that they need to protect their wealth from the government and Bitcoin seems to be a great option. The cryptocurrency is not controlled by any governing authority and there is relative anonymity. The amount of money traded on a LocalBitcoins in Hong Kong has doubled in just a few weeks, due in large part to the recent bill.
Brett McGonegal, CEO with Capital Link International, in an interview with Bloomberg TV said that Bitcoin can be a safe haven for people worried about their money. “The simple fact is, in a time when people are looking for some sort of safe haven or some hedge, money has found its way to Bitcoin. “The inflection point in any major play to a nascent asset class is the attachment point to institutional money. If institutional money starts to touch bitcoin that’s when you go much higher.”
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