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Bitcoin soars above US$11,000 for first time in 16 months

Bitcoin soars above US$11,000 for first time in 16 months

Source: Straits Times
Article Date: 25 Jun 2019
Author: Grace Leong

Cryptocurrency's lift follows Facebook's announcement of planned launch of Libra.

Bitcoin surged above US$11,000 (S$14,900) for the first time in 16 months as investors piled in on expectations that Facebook will take its digital currency, Libra, to mainstream users.

The world's largest cryptocurrency has been quietly recovering in recent months following the bursting of the bitcoin bubble after it hit a record high of over US$19,000 in December 2017, only to be followed by a 74 per cent collapse last year.

After hitting a near-term low of about US$3,100 last December, and languishing at around those levels for several months, bitcoin began rising again after news reports last month that asset manager Fidelity would join brokerages, including E*Trade Financial Corp, in offering cryptocurrency trading to clients.

But what sent bitcoin over the US$11,000 level was Facebook's announcement last week of its planned launch of Libra next year, backed by a host of companies including Visa and PayPal.

 

Other project partners, including eBay, Uber and Spotify, may eventually accept Libra as payment on their platforms as well.

Libra has the potential to introduce billions of users to the idea of value transfer via blockchain, which could benefit bitcoin as well, analysts say.

The digital currency will be managed by an independent non-profit called the Libra Association, whose members include Mastercard, Visa, eBay and Uber.

"Each of these members have millions or billions of users. This gives Libra a very good start," said fintech lawyer Koh Chia Ling of law firm OC Queen Street.

Mr Koh believes Libra, which may be considered a digital payment token, may have to comply with Singapore's securities laws and the Payment Services Act, which will streamline the regulation of all payment services and is expected to take effect by the end of this year.

"Among other things, the Payment Services Act regulates the dealing in certain digital payment tokens," he said.

"Issuers and exchanges dealing in such tokens will require a licence from the Monetary Authority of Singapore."

But even as Libra is validating the crypto space, the action at the few bitcoin ATM machines in Singapore has been muted.

The bitcoin machine at Ducatus Cafe at 138 Robinson Road has been unavailable for a few months due to an electrical problem, a company spokesman said. "We had significantly fewer buyers than we did in the early part of 2018. And transaction sizes ranged from $10 to $100."

That's a far cry from when bitcoin was at its all-time high in 2017, and "lots of foreigners, especially Koreans, were queuing with their luggage" to buy the digital gold at the cafe, Ducatus staff told The Straits Times.

With the crypto craze expected to regain momentum, Ducatus Cafe is dusting off its bitcoin machine and "actively promoting" it again. "We can't speculate on the adoption of Libra in Singapore, but we surely welcome its entry into the market," the spokesman said. "A globally recognised name further legitimises the digital economy, of which we are part of," she said.


Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

 

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