Unveiling Facebook’s Libra Wasn’t Supposed to Benefit Crypto
It may not be directly connected but since the unveiling of Facebook’s Libra crypto project on Tuesday June 18, the price of Bitcoin has been nudged to over a 400-day high. As at this writing, Bitcoin dominance of the crypto market has risen to 58% according to Coinmarketcap while the price touched $9800 on Friday before a slight reversal. It seems Facebook‘s announcing its own crypto project, which is supposedly not a crypto, is somewhat a plus to efforts to set mass adoption in motion.
Last year, Facebook banned crypto ads on its platform. Now, it announced its own crypto project for its global platform along with a consortium comprising mainly of top payment processors that have distanced themselves from crypto in the past. Nevertheless, their collective efforts stand to expose many people to the reason for them to learn more about cryptocurrencies – if it hasn’t started already.
So far, they seem to have helped to get many people talking about Bitcoin yet again even as Libra is at its early stage. These talks will likely continue for months as governments and policymakers show interest in scrutinizing Libra and its global intention.
Facebook preps the world for blockchain
The social media’s crypto-based payment system is set for release next year. Initiating discussions about it now creates a time frame, in a way, that suggests it is giving the masses more time to digest what blockchain technology is all about – or pique their interest. This is despite that regulators from India, to the US and Europe, are already pushing back against Facebook’s Libra cryptocurrency plans.
According to a Datalight research this week, Libra’s unveiling has been able to closely approach Bitcoin level of discussions on Twitter and far ahead of all other competitors. In its index of weight and quantity of coin’s mentions, Facebook’s Libra trails behind only Bitcoin leaving others like Ripple, Ethereum, TRON, Litecoin, Stellar and Binance beneath it.
Libra as a product obliquely presents a use case for the blockchain technology. Its proposed introduction is somewhat a validation of the blockchain technology by one of the largest tech companies in the world with the resources to bring a lot of value to the space.
The cryptocurrency from Facebook $Libra has not yet been released. But it was able to closely approach $Bitcoin level of discussions on Twitter far ahead of all other competitors pic.twitter.com/f5uN1EYcZu
— DataLight (@DataLightMe) June 19, 2019
Libra’s good to crypto
Put together, the tech giant’s Libra project is bringing crypto to the attention of over two billion people who can then decide on what they prefer. This view makes Libra become an excellent gateway to crypto for many new users despite its consideration as a mere centralized distributed ledger. Its success will be a win for blockchain-based apps that already have some users as it brings them the needed attention.
The attention won’t instantly translate the crypto market to surge as was the case in Dec 2017 when several altcoins gained a sudden pump. Bitcoin’s dominance may need to reach 65% before a turning point starts for altcoins like in the last bull market. Also, ETH which took over the bull run in 2017 following the ICO season, is not enjoying a similar fate now since prevalent IEOs today do not use ETH.
There is still a long way (about 2x) for Bitcoin to get to its overall all-time high (~$20,000) while ETH has about 5x to go. However, with the likes of Litecoin (though pending a block reward halving in the next two months), the Facebook effect could be setting in. Google searches for Litecoin has this week hit a yearly high despite the network has not really seen much development contributions of late.