Over the weekend, United States President Donald Trump tweeted about Facebook’s Libra cryptocurrency and expressed his negative thoughts about the corporation’s idea of the future of money. He also made comments about Bitcoin, and the entire emerging financial asset class of cryptocurrencies, and spoke of their “unlawful” usage in activities like cybercrime, ransomware, and money laundering – a chief concern across all international financial regulators, such as FinCEN and others.
Ever since Facebook revealed plans for its own digital currency called the Libra, the crypto market hasn’t been the same. Facebook’s interest in the asset class has caused government agencies and politicians to look much closer to the entire category. The regulatory pressure has caused crypto exchanges like Binance to block US citizens from its website, sparking concerns, and putting extended sell pressure on altcoins like Litecoin, Ethereum, and XRP.
But things got worse following a United States Senate Committee on Banking, Housing, and Urban Affairs hearing today, which prompted additional concerns over Facebook and cryptocurrencies.
The United States Puts Target on Facebook Libra, Taking Aim at Crypto Next
In a session entitled “Examining Facebook’s Proposed Digital Currency and Data Privacy Considerations,” Senator Sherrod Brown called Facebook “dangerous” and “disruptive” but not in a positive light how technology can be disruptive. Instead, the Ohio democratic senator said in his testimony that Facebook has led to much negativity in the world, such as the downfall of mainstream journalism and media, the manipulation of human emotion, and the social network even being used to interfere with presidential elections.
The senator and those like him fear that a corporation like Facebook, which has already abused its users’ privacy and cannot be trusted with information, also cannot be trusted with something as powerful as controlling the future of money.
Facebook partnered with dozens of other corporations including PayPal and Visa to form a consortium and remove some of the mistrust associated with Facebook’s brand name and legacy. However, Zuckerberg’s brand has already become so powerful, so influential, it’s become in a way a government and a nation of its own, and policymakers in every nation fear the how powerful Facebook is becoming.
In many cases, its influence of over the masses may have formed more loyalty with its users than many governments have, and Facebook arguably has more personal user data on its users than the US does on its citizens.
Unfortunately, the fears surrounding Facebook and their foray in the world of crypto, has also spilled into that world and is causing it to collapse.
Facebook Libra: The Story that Ended Bitcoin’s Bull Run
Following a parabolic rally from lows around $3,000 Bitcoin topped out at $13,800, representing well over 300% gains for savvy investors who caught the bottom. Its use as a potential safe haven amidst economic turmoil has caused it to rise along with gold, the Japanese yen, and Swiss francs.
But that all changes following Trump’s tweet and today’s Senate hearing. Fears over Facebook’s crypto has caused Bitcoin to drop below $10,000 and is showing extreme sell pressure as investors seek to close out in substantial profit.
The selling pressure could take Bitcoin back to extreme lows – similar to the selloff after the last parabolic rally that took us to $20,000 – which in the past were among the most profitable buy opportunities of the year.