Wednesday was not a very good day to be an owner of bitcoin. This is because the price of the world’s most popular cryptocurrency fell off a cliff. It dropped nine percent to $7,400. The sudden drop was thought to be caused by the negative remarks made by members of congress about cryptocurrency during the testimony of Facebook CEO Mark Zuckerberg. The subject came up as congressional committee members were asking Zuckerberg about Facebook’s proposed Libra cryptocurrency. It did not take long for news of the testimony to cause the crash.
There were a lot of people selling bitcoin. This is because bitcoin miners need the price to stay above $7,500 in order for them to break even. However, the drop below this threshold resulted in many bitcoins changing hands around the world. It will be interesting to see if bitcoin will be able to rebound. There are many experts in the financial world who believe that it is only a matter of time until bitcoin starts to see massive gains. Only time will tell if that is the case. There is no question that Zuckerberg’s testimony and the negative remarks made by members of the House Financial Services Committee resulted in the price slump for bitcoin.
There are many people who are not interested in buying bitcoin because of the volatility that it has displayed over the past few weeks. However, it also has many believers. Zuckerberg said that China is currently in the process of creating its own cryptocurrency that will be available fairly soon. Therefore, he feels that it is extremely important for Facebook to get Libra on the market. This will allow the United States to stay one step ahead of the Chinese on this issue.
Bitcoin is still the most valuable cryptocurrency. However, it will face tougher times ahead if Facebook is allowed to get Libra off the ground. Zuckerberg said during his testimony that Libra will be backed mainly by the United States dollar. Facebook as 2.4 billion global users. This means that it will be enormous competition for Bitcoin. Congress still has many things to sort out before they render a ruling on the future of Libra. Bitcoin was worth $10,000 several months ago. It’s sudden and rapid plummet to where it is now has many investors concerned. It might never climb back to those lofty heights again. We will have to wait and see.
Dil Bole Oberoi
