Bitcoin Slumps as Powell Warns Libra
The most prominent player on the crypto market took a dive after Fed Chair Jerome Powell warns Facebook’s Libra.
The king of cryptocurrencies fell 12.15% or 1403.9 points, currently trading at 11,554 US dollars. Prior to Powell’s testimony, the crypto coin surged for five days.
Other coins in the cryptosphere also plummeted after the testimony.
Ethereum lost 13.87% or 37.56 points, trading at $271.32. Litecoin fell 17.06% or 17.266 points, trading around $101.255.
EOS slumped 26.83% or 1.2380 points, trading at $4.6108. XRP declined 18.89% or 0.06273 points, presently trading at $ 0.33187.
Cryptocurrencies struggled during 2018, and just this year, crypto coins surged after Facebook announced that the company will have their take on the crypto world.
The crypto market is highly volatile to Libra news as the interest in virtual assets renewed when FB unveiled it last month.
Just recently, Jerome Powell, the Chairman of the US Federal Reserve since 2018, gave his testimony in front of the United States House of Representatives Financial Services Committee.
In his statement, the Fed Chair mentions that Facebook’s take on cryptocurrency raises serious concerns with privacy, money laundering, consumer protection, and financial stability.
Powell warns the social network giant that Libra cannot push through until it undergoes intense scrutiny and addresses the “serious concerns” of critics, regulators and the government.
He also added that the US Federal Reserve is currently working with other central banks around the globe, following India’s suggestion to prohibit the Bitcoin rival on the Indian crypto market.
What Weighs on the Crypto Coin?
Crypto traders and investors are having a hard time predicting the direction of the market.
According to data provider, the United States houses 26% of Bitcoin activity, adding the country has had trouble regulating the crypto coin due to regulator’s failure to reach an agreement on how to handle Bitcoin and other cryptocurrencies.
Christine Lagarde, a nominee for ECB head, also warned investors that the crypto market is “shaking the system,” a possible sign that if she will be the next head, the ECB’s approach to virtual assets may change.
An ECB executive said the Libra news is also a wake-up call for crypto regulators.
Facebook’s Response
Elka Looks, the spokeswoman of the social networking giant, said in an email to reporters that the company has the same views with the Fed Chairman acknowledging that the company needs to open a discourse with the public.
The spokeswoman also said that Facebook along with the 27 founding members of the Libra Association has decided to unveil the project as early as last month in to order engage in a discourse that would give the company constructive feedback and suggestions.
Later this month, Facebook officials are set to meet with the US Congress to discuss concerns about the Libra project. The company is welcoming the public to scrutinize the project early in the second half of the year in order to meet the 2020 launch date.
