Bitcoin has been doing very well in 2019, as the cryptocurrency has already more than doubled from around US$4,000 at the start of the year to Monday getting close to US$11,000. It’s a big recovery. Many people thought that Bitcoin was dead after crashing in 2018 after peaking at around US$20,000 in late 2017. Concerns about safety and security have had disastrous impacts on the adoption of the digital currency, especially with companies banning it and making it hard for prospective investors to learn about it.
However, since mysteriously receiving a big order this year, it’s been gaining traction and made a good recovery. While it still has a long way to go to getting back to its previous highs, there’s definitely interest in crypto again, and it’s even more impressive now that it has been able to rise given the obstacles that Bitcoin still faces today.
Facebook’s Libra gets the public interested in cryptocurrencies again
One of the big drivers behind the excitement lately has been news that Facebook (NASDAQ:FB) would be launching Libra, the tech company’s own cryptocurrency. Facebook says it’s not expected to be ready until next year, possibly even later than that, as it sorts through regulatory issues. The company knows there is still a lot of resistance and concern about digital currencies and the company’s COO Sheryl Sandberg recently told BNN Bloomberg, “We know we have a lot of work to do, but this was an announcement of what we would like to do with a roadmap for people to jump in and help us do it.”
Facebook clearly believes that there is a path for cryptocurrencies to become adopted into the mainstream, and that has gotten investors excited about the long-term possibility of not just Libra, but Bitcoin as well. It’s a big change from Facebook after the company announced it was banning Bitcoin-related ads, as it seemed to distance itself from digital currencies. Ironically, the company might end up promoting cryptocurrencies; in order for Libra to succeed, Facebook will have to address many of the same risks and fears that people have about Bitcoin as well.
Blockchain stocks to benefit?
One stock that investors will want to keep tabs on as Bitcoin keeps rising is Hive Blockchain Technologies (TSXV:HIVE), which has also been soaring this year. Up more than 80%, the stock’s performance is definitely correlated with the rise in Bitcoin. The more that the cryptocurrency remains in the news and in the mainstream, the better the odds that Hive will rally as well.
Even though blockchain and digital currencies are not one and the same, we’ve often seen them move in unison together. Hive is not dependent on Bitcoin for its success, as there are many other cryptocurrencies out there, but it is certainly the most popular one. And if Bitcoin is doing well, then that means people are talking about blockchain, and that could have a bullish impact on Hive’s stock price as well.
Like Bitcoin, Hive is also nowhere near its peak price a few years ago when it was trading at more than $6 per share. The good news is that there could be a lot of room for the stock to rise in value, especially if Bitcoin continues its impressive rally.
