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Investors hold their breath in anticipation of Congress Hearing on Facebook’s Libra set up for July 16-17. What’s in store for Bitcoin?
David Marcus, the head of the department managing Libra project at Facebook, will soon have to testify to the Senate Banking Committee and the House Financial Services Committee of the United States. The hearings are scheduled for July 16 and July 17 correspondingly.
Ahead of the session, Bitcoin showed a $3,000 value drop in as little as five days, and currently, it is trading at a price below $10,000.
The Facebook cryptocurrency Libra, anticipated in early 2020, already demonstrated a correlative effect over the price of Bitcoin. The evidence came when BTC jumped to the mark of $13,800 from $9,000 in a bit more than a week after Facebook’s disclosure of Libra White Paper on June 18. According to recent projections, Libra may boost the chances of Bitcoin hitting the threshold of $100,000 by 2021.
In the past, Bitcoin already proved to be vulnerable to Congress decisions. The biggest recorded change occurred in early 2018 when BTC lost its value from $12,000 to $6,000 in just 10 days following congressional hearing led by the Senate Banking Committee. The good news is, Bitcoin rose from the ashes and normalized to the level above $11,700 as a result of a positive outcome. The story can repeat if Libra officially gets green light from the US government.
From the very first days, Libra has been fuelling fervent discussions as of its odds to be unveiled to the world. Even now, the future of Libra does not seem to be cloudless on both sides of the Atlantic Ocean.
In Europe, Libra did not get a warm reception from the European Central Bank (ECB), whose executive board member Benoit Coeure called upon the regulators to take actions. As he explained further, an active response has to be adopted to combat the potential risk streaming from Facebook’s project. What is more, the UK is not particularly fond of Libra either. The country’s Central Bank looks into the possibility with caution and does not rush to grant it an approval.
The situation gets even more complicated in the US. In a recent tweet, Donald Trump expressed harsh criticism of Libra and cryptocurrency in general:
I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity….
— Donald J. Trump (@realDonaldTrump) July 12, 2019
Further, the Federal Reserve (Fed) chairman Jerome Powell openly declared that the Libra project cannot move forward unless all of the serious concerns coming with it are resolved. In the same way as ECB, Fed is also cautious and worries about Libra’s resulting effect on the soundness of the existing financial system. It only remains to be seen what effect it will produce over the decision of Congress.