The Libracryptocurrency is the first move from a major technology giant to take on bitcoin, which launched just over a decade ago. But far from unsettling the established cryptocurrency industry, Facebook‘s move into the space appears to have had a positive impact.
Bitcoin and other major cryptocurrencies like ethereum and ripple remained relatively stable following the announcement, with none shifting in value by more than 1 per cent.
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Rumours of Facebook’s cryptocurrency announcement had been ramping up in recent weeks, which some market analysts have attributed bitcoin’s recent gains to.
“Bitcoin has reached a record high since May 2018, reacting to reports of Facebook’s plans to unveil a digital currency,” Christel Quek, chief commercial officer of blockchain firm BOLT, told The Independent.
“Investors are scrambling back into crypto assets such as bitcoin and other alternate tokens, over optimism that they are becoming widely accepted and adopted mainstream entities.”
It is unclear what the long-term impact of Libra will have on the wider cryptocurrency space, with Facebook’s currency not set to launch until some point in 2020.
Some crypto experts point to the fundamental differences between bitcoin and Libra, which suggest the new cryptocurrency poses no threat to the space bitcoin currently occupies.
As a corporation operating within local laws and jurisdictions, Facebook’s Libra does not offer the decentralised, semi-anonymous functionality that bitcoin and other cryptocurrencies like it provide.
Ultimately, whether it is bitcoin or Libra that achieves mass adoption as a form of currency may have no impact on bitcoin’s overall value, as it can continue to serve as a store of value.
“Libra is a boost for the cryptocurrency sector, as it brings to the mainstream its use as a medium of exchange,” said Steven Eliscu from DMG Blockchain.
“While bitcoin remains an excellent store of value, bitcoin – as well as most other cryptocurrencies used on public blockchains – are not ideal to be used as a medium of exchange. [But] they will be an ever important asset class that hundreds of millions of people will hold.”
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