Facebook’s plans to launch its own cryptocurrency could change the game for Bitcoin, ETH, XRP, Litecoin, and other coins, in a positive and a negative way.
On the positive side, Facebook’s movement could change investor sentiment, as is already evident by the upward movement in cryptocurrency prices.
7d Price change for major cryptocurrencies*
Coin %7d change
Bitcoin (BTC) 15.70%
XRP 12.37
Ethereum (ETH) 9.22
Litecoin (LTC) 2.62
*As of 6/18/19, 2.40AM ET, Coinmarketcap.com
Number of cryptocurrencies that Advanced/Declined in the top 100 Ranks*
Cryptocurrencies Advance/Decline Number
Advance 73
Decline 27
*As of 6/18/19, 2.40AM ET, Coinmarketcap.com
“Growing chatter that Facebook is getting closer to launch its own cryptocurrency has helped lift sentiment in the crypto space and has largely been credited as the catalyst for the latest rally,” says Jesse Cohen, U.S. markets editor at global financial platform Investing.com. “Whenever a company as large as Facebook gets involved it helps give a larger degree of legitimacy and mainstream acceptance to an industry still plagued by speculation of illegal activity and regulatory scrutiny.”
Nisa Amoils, a venture capitalist at New York Angels, agrees. “The announcement of more institutional players coming into the asset class like Facebook and Bakkt both announcing this month only furthers the bullish outlook,” says Amoils. And that brings out the fear of missing out crowd (fomo), according to blockchain entrepreneur Kirill Bensonoff.
How high could Bitcoin climb? “From a technical perspective, prices look set to test the $12,000-level in the weeks ahead as positive momentum builds and the fear of missing out kicks in,” says Cohen. Amoils adopts a more bullish outlook. “Some think it can go to 50,000. Since it has more than doubled since April and is now at 9000 they could be right. Hard to speculate,” says Amoils.
On the negative side, Facebook’s movement could place big governments on alert.
Bitcoin and other major digital currencies are “people’s currencies.” They have the potential to become new decentralized currencies, free of the control of big governments.
That’s why big governments cannot tolerate digital currencies that threatens to break their monopoly on printing money, and to manipulate the economy to accommodate the interests of powerful elites.
And big have the ways to end the game altogether.
That’s why investors should temper their enthusiasm over the sustainability of this sort of rallies.
[Ed. note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.