By Yash Deshmukh
Cryptocurrencies have been on a roll in recent weeks, and Bitcoin is leading the pack.
When people think about cryptocurrency, the first thing that comes to mind is Bitcoin. That is because Bitcoin was the first-ever cryptocurrency. Satoshi created Bitcoin in 2009 when he restructured the blockchain to support such digital currencies. Bitcoin’s value, which peaked at $19,000 in December of 2017, fell significantly soon after. It re-surged past $10,000 on June 21, 2019, for the first time since February 2018. The sudden resurgence of Bitcoin’s value could be due to, in part, to two reasons.
India’s Potential Ban
First, rumors circulated that India was drafting up a bill that would ban the use of cryptocurrencies within its borders. India is among the countries where cryptocurrencies are gaining the most traction. The rumors first circulated at the end of April 2019, and many believed that they caused a Streisand Effect both in India and worldwide. The Streisand effect is a phenomenon whereby an attempt to hide, remove, or censor a piece of information has the unintended consequence of publicizing the information more widely, usually facilitated by the Internet. The rumors brought Bitcoin and other cryptos to the forefront of Indian mainstream media. Since the rumors foreclosed that India may ban the purchase of cryptocurrencies, thousands, if not millions, bought cryptocurrencies while they could. The sudden interest and consequent inflow of buyers may have been what pushed Bitcoin’s value past 10k.
Another theory connects the value spike to Libra, Facebook’s announced cryptocurrency. Because Libra isn’t decentralized and its value is tied to the US Dollar, some argue that it isn’t a true cryptocurrency. But, news of a tech giant such as Facebook developing a coin gave mainstream credibility to all cryptocurrencies. This would explain why the values of all cryptocurrencies increased on the 21st. Due to a newfound mainstream coverage and credibility of cryptos, skeptics and previously uninformed individuals viewed crypto in a new light. That might have been a source of a large influx of buyers. However, experts say that investors who figured that if and when Libra became successful potentially caused the resurgence of Bitcoin. The success of Libra would possibly make Bitcoin, a more true and decentralized cryptocurrency, more sought after.