A.On Monday afternoon the time had come: The digital currency Bitcoin reached a new record high. The crypto currency rose to $ 19,857 shortly after 4 p.m. German time. The long-awaited $ 20,000 mark has not yet been broken. The digital currency is thus continuing its upswing that started in the autumn days. The reason was generally seen as the growing interest of institutional investors. Plans by the payment service PayPal to accept Bitcoin as a means of payment are also seen as a strong price driver.
And yet this rally in digital currencies is different than it was three years ago. On the one hand, the number of large depots with more than 1000 Bitcoin is increasing sharply: Today there are more than 2200 of them, which corresponds to an increase of 37 percent in 2018. You can see even more strikingly from the market capitalization that this time is a little different: At that time, the market capitalization of all digital currencies rose to around 830 billion dollars. Today it’s only $ 580 billion – that’s $ 250 billion or around 30 percent less. This means that the rally is being driven disproportionately by Bitcoin and less by other digital currencies.
As a reminder: During the rally in 2017, Bitcoin dominance fell from over 80 percent to at times only 33 percent in January 2018. This means that only a third of the market capitalization at that time was carried by Bitcoin, but two thirds by other digital currencies. And today? In concrete terms, the oldest and known crypto currency has been consistently dominant over 60 percent for months, with a few outliers downwards. You can see that in the other digital currencies.
The biggest players have remained the same as they did three years ago: First of all, Ethereum and Ripple should be mentioned, for years the numbers two and three of the digital currencies. However, their relative importance has decreased. Ethereum has fallen from its peak today with a market capitalization of 32 percent to 12 percent. Ripple fell from 18 percent to 5 percent, and many small digital currencies have emerged and become more important. In total there are now more than 7800 crypto currencies. The top 10 includes five digital currencies that didn’t even exist at the time. No wonder, because in 2017 there were only 1,300 crypto currencies.
Libra becomes Diem
The cryptocurrency, largely supported by Facebook, is now trading under a new name to emphasize its independence from the American Internet company. The renaming is part of a reorganization to a simpler structure, said the chief executive of the Geneva-based Diem Assocation, Stuart Levey, on Tuesday the Reuters news agency. Diem, which means “day” in Latin, should become a digital coin linked to the dollar. Levey did not give a schedule for the introduction. First of all, the approval of the Swiss supervisory authorities must be given.
Facebook remains “an important member of the association,” which has a total of 27 members, said Levey. “We’re not trying to cut all connections, by no means.” The name change should underline that the Diem
Association “works autonomously and independently,” he added. Diem wants to differentiate itself from other Krypo providers by taking into account the issues important to regulators and Western governments – including
Sanctions controls and financial crime, Levey said.
With its plans for its own digital money, Facebook had called governments, supervisors and central banks worldwide into action. In April, the Libra Association in Switzerland, which was founded to set up the Cyberdevise, submitted an application
for approval as a means of payment. However, many governments have reservations about letting Facebook penetrate the financial sector with a digital currency.
Meanwhile, the “Financial Times” reports that the Internet currency Libra could start as early as January 2021. The development under the leadership of the social network Facebook is to be slimmed down, however. The company has said goodbye to the idea of covering its own token with different currencies. Instead, Libra relies on one-to-one coverage with the dollar. Whether Libra will get the green light this time is still questionable. At the same time, central banks are already working on their own digital currencies. In Europe, for example, the digital euro is being discussed, but it will still be years away.