Bitcoin likes Facebook.
Facebook, the eponymous social media site, has officially launched its own cryptocurrency – Libra – as it now is officially dipping its toes into the cryptocurrency market. And it continues to lift and buoy the crypto universe – starting with Bitcoin.
As per its website, Facebook via the Libra Association announced Libra, a simple global currency and financial infrastructure that can empower billions of people. Libra will be built on a secure, scalable, and reliable blockchain; it will be backed by a reserve of assets designed to give it intrinsic value; and it will be governed by the independent Libra Association, which was formed to manage and evolve this new ecosystem.
With Libra, we will enable developers and businesses to build new, inclusive financial service products for people all around the world., Libra said in a release. This ecosystem will be underpinned by the Libra Blockchain, a new blockchain that has been built from the ground up to prioritize scalability, security, and reliability, as well as the flexibility required to evolve over time; and the Libra Reserve, a reserve of real assets that will back the Libra currency, providing low volatility, wide global acceptance, and fungibility.
The Libra Association will be responsible for facilitating the development of the Libra Blockchain and managing the Libra Reserve. Members of the Libra Association will consist of geographically distributed and diverse businesses, nonprofit and multilateral organizations, and academic institutions. The initial group of organizations that will work together on finalizing the associations charter and become Founding Members upon its completion are, by industry:
Payments: Mastercard, PayPal, PayU (Naspers fintech arm), Stripe, Visa
Technology and marketplaces: Booking Holdings, eBay, Facebook/Calibra, Farfetch, Lyft, Mercado Pago, Spotify AB, Uber Technologies, Inc.
Telecommunications: Iliad, Vodafone Group
Blockchain: Anchorage, Bison Trails, Coinbase, Inc., Xapo Holdings Limited
Venture Capital: Andreessen Horowitz, Breakthrough Initiatives, Ribbit Capital, Thrive Capital, Union Square Ventures
Nonprofit and multilateral organizations, and academic institutions: Creative Destruction Lab, Kiva, Mercy Corps, Womens World Banking
Over the coming months, the association and its members will be recruiting additional members to further diversify and support the network. We will also be raising money in a private placement to help jumpstart the ecosystem and drive adoption. We will also continue engaging with regulators, policymakers, and experts to solicit feedback and ensure that this global financial infrastructure is governed in a way that is reflective of the people it serves. We believe this will be a significant undertaking – and responsibility – and we will continue to work openly and collaboratively as we move toward our goal of launching this new ecosystem in the first half of 2020.
And as a rising tide lifts all ships, Libras official launch has supported and continues to support the main cryptocurrencies such as Bitcoin, lifting it from a dismal 2018 performance to the current rally. Bitcoin currently stands at $9151.15. According to some, the next Bitcoin run is imminent.
Nigel Green, founder and chief executive of deVere Group, said that as Bitcoin has climbed from $8000 just one week ago to almost $10000, said the currency , Ditched its trademark volatility, Bitcoin has been stuck in no-mans land for over a week oscillating within a $600 range. But the price of the worlds largest cryptocurrency has surged to the upside.
The continued upward trajectory in the currency, due in part to the Libra announcement, could indicate that Bitcoin is on the verge of the next bull run, Gree said.
Crypto history teaches us that periods of low volatility come directly before extended crypto bull runs. Should Bitcoin experience a new run, we can expect it to deliver a boost to the wider crypto market, with other leading cryptocurrencies such as Ethereum, XRP and Litecoin, rallying too, Green said.
Christel Quek, Chief Commercial Officer, Co-Founder, BOLT.Global noted that as Bitcoin has hit and moved past $9,000 for the first time since May 2018, is a direct reaction to Libra.
Investors are scrambling back into crypto assets such as bitcoin and other alternate tokens, over optimism that they are becoming widely accepted and adopted by mainstream entities, Quek said. Facebooks entry into the crypto space perhaps signifies the biggest network potential for digital currencies, capable of reaching into billions, and therefore indicates an upcoming shift in mainstream finance.
He added that he is encouraged by the market responses and Facebook’s entry into the crypto currency space.
This may see further revival and growth of digital tokens this year, as more developments emerge, he said. I wouldnt discount a degree of volatility of course, as hobbyist investors engage in profit taking and perhaps governments attempt to legislate digital finance.
Nicolas Colas, co-founder of DataTrek, said in a recent feature that given the interest in Libra and Bitcoin, he performed a a quick check-in on his two favorite fundamental indicators for the crypto currency that measure incremental interest and adoption:
#1: Google search trends, a proxy for potential new users:
Online interest in bitcoin spiked in mid-May 2019 as it moved quickly from $5,400 at the start of the month to $8,200 on the 15th.
Since then, the number of global Google users querying for the term bitcoin has fallen by 36%.
That said, Google search interest in bitcoin remains 50% higher than where it was in Q1 2019.
See the Google Trends chart here: https://trends.google.com/trends/explore?q=bitcoin
#2: Global growth in the number of bitcoin wallets, one measure of adoption (i.e. actually moving money from fiat to crypto currency):
After averaging 2.8% monthly growth in Q1, the wallet count grew by 5.8% in April and 6.0% in May 2018.
June has been a little slower at a run rate of 3.1% so far for the month, but still ahead of Q1s average.
Also worth noting: the total number of bitcoin wallets has grown by 24% in 2019 and now stands at 39.5 million.
The upshot here is that bitcoins recent move over $9,000 looks to be part of a grind higher based on these fundamentals, Colas said. So why would bitcoin rally into an announcement of a potentially powerful rival? First, the fact that Facebook et al even want to build a crypto currency validates the idea of a decentralized currency/payment system. Second, and more importantly, for every company that is part of Libra, there are thousands who are not. What technology will they use? Bitcoin is one answer.