Bitcoin hits $7,500 – Facebook and Fidelity have “lit a fire under Bitcoin”


Global equity markets took a beating on Monday morning, but Bitcoin just kept rising beyond all present expectations, crossing over $7,500 not once, but twice over the past few days. Analysts that had become “gun shy” after the Tether/Bitfinex scandal and the Binance exchange compromise are out in droves, raving about the resilience of Bitcoin and how it is rising while stocks are falling. Is Bitcoin the new “digital gold”, as many have claimed? Credit for the forward momentum is presently being given to fundamental factors, namely that both Facebook and Fidelity are beating the crypto “drums”.

As for equity markets, the S&P 500 index, which is our best barometer for the global economy since half of the revenues of its participants are derived from overseas operations, was down 2.3% in early trading. The apparent shock was a response to Trump the “Tariff Man” re-igniting the trade war with China by implementing a new round of tariffs. While bragging about the billions to be received, the funds are actually a “tax” on American households of roughly $750 a year in increased prices for consumer goods. These tariffs will also have an impact on consumer prices around the world, as well.

Bitcoin, for the moment, however, seems to be immune to the trade war news. It just keeps rising. Analysts had reached a consensus that $6,000 would be a formidable target, but BTC blew past that benchmark during last week and is now pressing up against $8,000. In a matter of hours, it leapfrogged $7,500 and is still headed north. The $7,000 mark offered no resistance at all, but what is going on behind the scenes to generate such a forceful move in the market?

Analysts are pointing to this headline news:

Facebook, the world’s largest social media network, boasting more than two billion users across its various platforms, is ramping up its plans to launch a rival to bitcoin following reports it’s looking to get venture capital firms to invest in its cryptocurrency project.

Spencer Bogart, a partner at venture capital firm Blockchain Capital, recently remarked to Bloomberg that the fact that Facebook “plans to launch a bitcoin rival” has “lit a fire in the pants of every major [financial technology] and financial institution in the U.S.”

Bogart went on to add:

We have seen public reports of what Facebook might be working on – most of that is pretty private. But what we do know is that they have [an extensive] and serious team that is working on some public blockchain effort—some payment system. Once [Facebook users] own [Facebook Coin], it will be like being on the internet so people can spin-out and start owning bitcoin, ethereum … Bitcoin has gone from zero users ten years ago to somewhere between 30 million to 100 million –the estimates are rough. And Facebook has billions of users.

Bogart sees the Facebook project as becoming a “catalyst for mainstream bitcoin and cryptocurrency adoption around the world” by not only consumers, but also financial and technology companies, as well. These thoughts speak to the future, but in present tense, it was revealed last week that the social media giant will “grow its London office to take on the project”. The firm is recruiting roughly 100 software engineers in London, with plans for support in Dublin, too. Facebook already has a pilot running in India with its 200 million WhatsApp users to test its platform and work through regulatory issues.

Aside from Facebook, the financial news is also abuzz about developments at Fidelity Investments, with over $7 billion assets in tow and 30 million plus customers to unleash when its crypto trading platform and custodial service, designed with institutional investors in mind, is open for use “within weeks”. One excited observer noted:

You couple that custody with the new trading and it seems like they’re really putting a suite of products here together to ease people into this market.

Technical charts might suggest possible future targets on the crypto market horizon, but fundamental forces are what actually influence price behavior in all financial markets. The combination of both Facebook and Fidelity stirring the fundamental “pot” together is having a far greater impact than even the most ardent crypto diehard could ever have imagined. Analysts now speak of $20,000, as doable for Bitcoin by 2020. Time will tell.

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