Bitcoin Gets a Skip at U.S. Senate Hearing on Facebook Libra, BTC Price Dives Below $10K

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by Bhushan Akolkar · 3 min read
Bitcoin Gets a Skip at U.S. Senate Hearing on Facebook Libra, BTC Price Dives Below $10K
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Receiving no attention at the senate hearing on Tuesday, Bitcoin price tanked over 10% on Tuesday. There’s little to no positive response from the US lawmakers for Facebook’s Libra which has created an overall negative sentiment around Bitcoin as well.

Tuesday, July 16, was the D-day for Facebook as the company’s blockchain division head David Marcus testified in front of the U.S. Senators. Over the last few weeks, the US lawmakers were constantly attacking Facebook’s Libra Project. However, David Marcus had previously assured that the company would comply with the regulators in all possible manner.

The hearing on Tuesday was no different! The lawmakers threw some questions on Facebook’s privacy concerns. But it seemed that rather than understanding the tech, they were just interested in cornering Marcus. Despite Marcus’ repetitive attempts to explain the benefits of the tech, the senators pinned him on Facebook’s past failures. In his opening remarks, Marcus said:

“Our first goal is to create utility and adoption, enabling people around the world – especially the unbanked and underbanked – to take part in the financial ecosystem”.

He assured that Facebook has no ambitions to dominate the money supply and create political influence. He assured that the Libra Association “will work with the Federal Reserve and other central banks to make sure Libra does not compete with sovereign currencies or interfere with monetary policy. Monetary policy is properly the province of central banks.”

Bitcoin Gets a Skip, BTC Price Dives Below $10K

In addition to Libra, the US lawmakers were also attacking Bitcoin and cryptocurrencies in general. Even the US President Donald Trump recently tweeted that he’s not a fan of Bitcoin. He further added some criticism for the highly volatile nature of Bitcoin. Similarly, U.S. Treasury Secretary Steven Mnuchin asserted that Bitcoin, Libra, and other cryptocurrencies pose a national security threat.

But on the Tuesday hearing, it seemed the U.S. senators just wanted to target Libra. There was hardly any mention about Bitcoin during the entire two-hours of hearing.

In the last 24-hours Bitcoin price has crashed below $10,000 levels losing over $1000. The world’s largest cryptocurrency lost nearly $21 billion in market cap valuations. At the press time, Bitcoin (BTC) is trading at a price of $9557 with a market cap of $170 billion. Over the last week, Bitcoin lost over 25% of its price and market cap.

But Bitcoin is not alone as almost all of the top ten cryptocurrencies have lost nearly 10% price over the last 24 hours. Over the last week, the overall cryptocurrency market lost over $75 billion market cap.

Senators With Pro-Crypto and Pro-Libra Views

While a majority of the senators present at the hearing were busy grilling David Marcus, a few sounded positive for cryptocurrencies and Libra. Sen. Kyrsten Sinema (D-Ariz.) said that digital currencies were FUD-free. She added:

“Despite granting anonymity, cryptocurrencies aren’t the first choice for drug traffickers … because cryptocurrencies aren’t easy to use”.

Sen. Pat Toomey (R-Pa.) grilled Marcus over Facebook’s data sharing and consent. However, he sounded bullish on the use of blockchain technology and also warned against unnecessary and excessive regulations:

“We shouldn’t prevent what can be a tremendous financial innovation. There is a big potential in blockchain technology.”

Forcing Regulators Into Action

So far the regulators have been delaying in getting clear crypto regulations in the market. Experts from the financial and crypto industry believe that Facebook’s Libra announcement has forced regulators into action.

Banking Committee Chairman Mike Crapo said:

“The Libra announcement has heightened the need for policymakers and regulators to establish clear rules of the road.”

Be as it may, despite loud regulatory chorus on Facebook’s Libra and, subsequently, cryptocurrency market in the whole, early Bitcoin adopters still put their faith in the bright digital future:

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Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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