Bitcoin's Value Passes $11,000 After Libra Announcement

Credit: Shutterstock / SPFCredit: Shutterstock / SPFBitcoin's value surpassed $11,000 per coin on Saturday morning. The cryptocurrency's value has stayed around that $11,000 mark in the hours since, according to the Bitcoin Price Index from Coindesk, which also said the coin's market cap is currently around $193.6 billion as a result of the price bump.

That's a sharp increase from the $7,600 price Bitcoin fetched on June 9. It's hard to attribute the cryptocurrency's value to anything in particular--such is the nature of decentralized money--but many have attributed it at least partly to the Libra cryptocurrency Facebook announced on June 18. Bitcoin and Libra don't have a direct relationship, but pun intended when we say that the cryptocurrencies are in many ways two sides of the same coin.

Libra differs from Bitcoin in that it's a "stablecoin" whose value is supposed to remain fairly consistent. Facebook said that Libra "will be backed by a collection of low-volatility assets, such as bank deposits and short-term government securities in currencies from stable and reputable central banks." The company's goal is essentially to introduce a blockchain-enabled currency that's comparable to traditional currencies many people already use.

Bitcoin differs in that it's not really backed by anything. The cryptocurrency's value is based on what people are willing to pay for it, not some commodities held in a reserve, which is why the price of a single bitcoin can vary so drastically over a relatively short period of time. Buying into Libra is like exchanging a currency; buying into Bitcoin is closer to investing in a volatile stock with the hope of getting a good return on investment later on.

Those approaches can coexist. (As evidenced by, you know, the modern economy.) Libra's announcement could also introduce billions of people to cryptocurrencies, and if they decide they'd rather play a given coin like a stock market rather than simply using Facebook's take on cash, Bitcoin would be the obvious choice. It's possible that some Bitcoin investors think Libra's announcement and release will raise the value of all cryptocurrencies.

Passing the $11,000 mark is probably welcome news for Bitcoin owners either way. The cryptocurrency's value has risen and fell many times over in the last few years. Bitcoin's value peaked around $19,000 in 2017; in recent months it's been closer to $7,000. Peaking at $11,190 over the last 24 hours didn't restore Bitcoin to its former glory, but it showed that at least some of the cryptocurrency market is bullish on its future.