BY DAYO ADESULU
On Wednesday, buy trades worth over $200 million were loss on trading platforms. Traders in the market hurriedly dumped their bitcoin and alternative coin within minutes.
Many investors of cryptocurrency who were not attuned with global trends wondered why the sudden crash of Bitcoin.
Bitcoin which was sold on Tuesday and early Wednesday for above $8,000. It subsequently fell to below $7,500 with a few minutes. the lowest in four months.
Experts in the sector, however, believed that the sudden crash of bitcoin was born out of fear the unknown.
Meanwhile, Wednesday had been fixed months ago for Mark Zuckerberg, founder of Libra coin to testify in the U.S Congres. He is meant to defend his plans to launch Libral Coin.
However, Zuckerberg had not started his defence when the cost of bitcoin and other coins began to fall sharply.
Many Bitcoin investors sold off because they were afraid. And are aware of the stiff opposition from US lawmakers and governments around the world against Bitcoin and alternative coins.
Therefore, marketers never believe that the outcome of Zuckerberg meeting with the Congres would be positive.
Zuckerberg before the Congres will increase regulatory scrutiny on cryptocurrencies
They believed that the appearance by Zuckerberg before the Congres could further increase regulatory scrutiny on cryptocurrencies. Thereby leading to price depreciation. So many holders of Bitcoin sold them.
CCN said, ”following the plunge in the price of the leading cryptocurrency, buy trades worth over $200 million were liquidated.
The CCN used BitMEX trading platform as a case study of the huge loss experienced by traders.
CCN reports that over an hour since Bitcoin fell by over $500, the value of the longs that had been liquidated on Bitmex stood at $211.7 million according to Datamish.
Meanwhile, Zuckerberg prepared remarks before the Congres, revealed that he would tell lawmakers that America risks losing “financial leadership” to China if they don’t get behind his company’s plan.
Zuckerberg was prepared to argue before the Congress that China had proposed digital currency which is expected to launch before the end of 2019.
“While we debate these issues, the rest of the world isn’t waiting. China is moving quickly to launch similar ideas in the coming months. If America doesn’t innovate, our financial leadership is not guaranteed, ” Zuckerberg argued.
Questions of trust on Facebook and Libra Coin
Just like cryptocurrency investors speculated that led to the Wednesday crash in Bitcoin, Facebook’s founder at the Congres was faced with criticism from both Republicans and Democrats alike
With several Congress members saying they did not trust Facebook to provide its users with a cryptocurrency, given its record.
But some Republicans were a bit more sympathetic and argued that the government should not stand in the way of innovation in the private sector.
“I have my own qualms about Facebook and Libra and the shortcomings of Big Tech,” said Representative Patrick McHenry, the top Republican on the panel. “But if history has taught us anything, it’s better to be on the side of American innovation.”
Zuckerberg Faults Libra project
Zuckerberg promised that his company would seek US regulatory approval before launching Libra. The digital currency project has received its fair share of criticism over fears it may enable money laundering and upend the global financial system.
To date, several financial partners including Mastercard, Visa, PayPal and eBay have backed out of the Libra project. But Zuckerberg is moving ahead, partnering with a Switzerland-based consortium, which included venture capital firms and nonprofits, to make it happen.
“Why do a number of these founding members have concerns about whether you’re up to the task of meeting our money laundering and regulatory standards?” Republican Representative Ann Wagner asked.
The 35-year old CEO conceded that companies dropped out because Libra is a “risky project” and that ultimately, he was not sure it would even work.
“It would be beneficial for all if Facebook concentrates on addressing its many existing deficiencies and failures before proceeding any further on the Libra project,” Democratic Congresswoman Maxine Waters told Zuckerberg.
Many investors in bitcoin have earlier argued if Libra coin is real cryptocurrency or not. They believe it does not have the features of cryptocurrency.
Mark Zuckerberg has also played into their hands when at the U.S Congres said he was not sure whether the Libra Coin will work.
Companies dropped out because Libra is a “risky project” and that ultimately, he was not sure it would even work. ” Libra is a “risky project” and that ultimately, I am not sure it would even work,” He said.