Bitcoin pulled back from an 18-month high today after breaking the $11,000 barrier over the weekend, with many attributing the rise to the launch of Facebook libra.
The world’s biggest cryptocurrency reached $11,248 (£8,822) on Sunday night, according to the Bitstamp exchange.
Bitcoin then dropped back early on Monday morning. It stood at $10,891 shortly after 1pm UK time, meaning it had risen 2.5 per cent in 24 hours.
Numerous analysts said the rocketing price was thanks in large part to Facebook’s announcement of its intention to launch its own cryptocurrency called libra.
On Tuesday, when Mark Zuckerberg’s company made the announcement, Bitcoin stood at around $9,300, according to Bitstamp.
Naeem Aslam of Think Markets said Facebook’s move had “renewed mainstream interest in crypto currencies and the technology which underlines it” and had given Bitcoin some “tailwind”.
Craig Erlam, senior market analyst at Oanda, said traders saw the news as “legitimising the industry which has come under scrutiny since falling more than 80 per cent from its peak” in 2017.
In early 2017 bitcoin peaked at over $19,000 in December 2017 before crashing to almost $2,500 within a year.
Neil Wilson, chief market analyst at Markets.com, said: “Investors are ignoring what happened the last time we saw parabolic rises like this.”
“Is it different this time? No, but people have short memories,” he said.