Bitcoin slumps as Facebook's libra hit by US backlash - TechCentral

Bitcoin slumps as Facebook’s libra hit by US backlash

The hostility toward Facebook’s libra cryptocurrency appears to be weighing on the sentiment for bitcoin.

The world’s largest cryptocurrency dropped as much as 8.7% to US$7 418 in New York, the lowest level since May. Other digital tokens such as ether and litecoin, which dropped 9.5% and 12% respectively, slumped even more as Facebook CEO Mark Zuckerberg testified before the house financial services committee on Wednesday.

”The main reason for this is because of the immense pressure Facebook’s libra is getting from Washington,” said Matt Maley, equity strategist at Miller Tabak + Co. “That is basically making it much less likely that bitcoin will go mainstream as quickly as some of its bulls think it will.”

Potentially adding to concern is the news that Google has built a computer that’s reached “quantum supremacy”, performing a computation in 200 seconds that would take the fastest supercomputers about 10 000 years. Sceptics of cryptocurrencies have noted that advances in computing could make the slower proof of work system used by bitcoin and other tokens obsolete.

As often the case with cryptocurrencies, traders pointed to an array of potential catalysts for the sudden spike down in prices around 8.30am New York time. Among the reasons cited were liquidation of futures contracts on exchanges such as BitMex, the stablecoin tether trading at a discount to parity and a general lack of liquidity among cryptocurrencies.

“The fact that this is losing so much momentum so quickly is telling people that bitcoin as a widely accepted currency is going to take longer than they were hoping,” Maley said.  — Reported by Claire Ballentine, with assistance from Olga Kharif and Alastair Marsh, (c) 2019 Bloomberg LP

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