At press time, bitcoin has spiked to $10,600. While this may not seem like much at first glance, the currency hit a serious curb roughly two days ago when it fell below the $10,000 mark to $9,600 following several ugly blows to its reputation. It is now trading for about $1,000 higher, suggesting that perhaps, while volatility is still prevalent, bitcoin is indeed tougher than it was years ago, as we’ve been saying for some time.
The first nasty hit to bitcoin occurred when U.S. President Donald Trump released several tweets suggesting that cryptocurrencies “weren’t money.” He said that he didn’t care for digital assets, as their values were based on nothing but “thin air.” He also commented that many were magnets for money laundering and other illicit activity, such as drug transactions.
From there, David Marcus, the head of Facebook’s blockchain division, was hit with numerous questions in a Senate hearing regarding the social media conglomerate’s new cryptocurrency Libra. As it turns out, many Senators and people in Congress weren’t too crazy about Facebook entering the financial space. Since the Cambridge Analytica scandal last year, users’ trust of Facebook has seemingly dropped to all-time lows, and many think the company knows little or nothing when it comes to keeping people’s private information safe and secure.
Thus, the idea of Facebook having access to one’s monetary data was a little frightening to many in Congress. They ultimately asked the company to hold off on its development plans indefinitely until they could better understand the coin’s properties and where the company was planning to go with it. Today is the second day of this ongoing Senate grilling. Marcus is still being questioned, and it appears the Libra team is willing to cooperate with congressional requests to keep Libra development to a minimum.
Some might consider this a huge blow to cryptocurrency, but this isn’t necessarily true. If Libra isn’t fully understood, the proper research and attention must be devoted to it prior to its release. Otherwise, many users who are planning to get involved could wind up stuck in the middle of a financial plan that puts their data in needless jeopardy.
Second, Facebook still needs to prove to everyone that it knows what it’s doing. That it’s learned from the Cambridge Analytica scandal and that it will do everything in its power to ensure people’s financial information doesn’t wind up in the wrong hands.
In the middle of everything, bitcoin has risen quite a bit, suggesting that the present hits didn’t have as big an impact on the currency as we might have thought. In addition, several analysts predicted that Trump’s words specifically would careen the currency deeper into mainstream territory. Maybe this is the beginning of their predictions coming true.
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