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The Libra effect on bitcoin price

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Satoshi&Co Daily Crypto Newsletter

June 24 · Issue #200 · View online
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Check out past issues of the newsletter along with more interesting crypto content as well as our recently-launched podcast series with leading crypto industry participants at our newly-launched website

Last week’s sharp appreciation in the price of Bitcoin saw it cross the $10k psychological mark, a level that has not been seen in almost 18 months. While Bitcoin has been on an upward trend since the last week of March, when the price was around the $4k level, the 20% price appreciation over the last week can most likely be attributed to the launch of Facebook’s Libra token. The consensus market view seems to be that facebook wants to integrate Libra as a payment mechanism on its various social media and messaging platforms. This is a big boost for cryptocurrencies in general as more people will now be brought into the cryptocurrency ecosystem through Libra.
Do check out past articles on Libra here, here and here.
Facebook, along with its partners can make quite an impact on wider crypto adoption, even if the preliminary objective seems to be to lay out the blueprint for an overarching global payments infrastructure system that will benefit Facebook and its partners disproportionately; a system that will eventually be fairly decentralized, given that Facebook will only have 1% of the total governing vote.
Is Libra competing with any of the major cryptos? What about Fiat? What are ramifications for regulators?
Libra is not competing with bitcoin. Bitcoin is a great SoV (Store of Value), a better version of Gold, with similar correlation characteristics that Gold exhibits with other traditional asset classes.
Libra is not competing with Ethereum, which is clearly the most widely accepted trusted, distributed computing platform.
Libra does not compete with XRP; XRP and Libra are going after two almost non-overlapping markets. XRP aims to become the de facto settlement currency and platform for SWIFT and interbank transfers. Libra is more focused on becoming a global currency for MoE (medium of exchange) between consumers. Libra does not really pose a threat to XRP, at least for now, unless the massive success of Libra forces financial institutions around the world to start accepting Libra as a legitimate currency.
Libra’s main competition, should it take off and achieve its vision will be traditional fiat currencies. If value transfer can happen smoothly and efficiently on the Libra network and if Libra becomes a substitute for fiat currencies, as is for instance, very much possible in a place like Venezuela where Facebook has 12 million MAUs and where bitcoin is the de facto currency, then the central bankers and the governments will have a different sort of problem to contend with. It will get even more complicated for regulators if Libra becomes a gateway crypto from where folks move on to Bitcoin, ZCash, Monero, Grin, etc. At least with Libra the regulators have a corporate target to go after and haul in for instance, for a congressional hearing. That would be next to impossible for most of the key cryptocurrencies.
Bitcoin’s sentiment analysis indicates that as soon as the news about Libra’s launch broke, Bitcoin’s bearish sentiment reversed its trend and swiftly moved into positive category as seen in the image below. Libra’s launch drew eyeballs from a lot of serious institutions and has resulted in an exponential growth in awareness of cryptocurrencies among non-crypto users.
Meanwhile in Crypto Wonderland....
“Florida City Agrees To Pay 65 Bitcoins In Ransom”
Riviera Beach, a small city in Florida, has recently been facing the onslaught of a series of crippling ransomware attacks. The authorities have finally given in to the demands of the hackers and agreed to give out as many as 65 bitcoins (which are worth well over $650,000 at the time of writing) to gain back access to their files. As per reports about the incident in question, the city’s authorities have been hit hard by the attack as all of the city’s online operations have been disrupted as a result of the ransomware. Utility payments and email services have been cut off and the attack, waged by unknown hackers, have had a slew of repercussions on the public life of the city.
“Microsoft and Ethereum Foundation Join Hyperledger”
United States tech giant Microsoft and the Ethereum Foundation are among the latest companies to join the ranks of the Hyperledger greenhouse hosted by the Linux Foundation. Many notable names in the tech and wider business fields today are developing enterprise-grade solutions based on the expanding set of tools built on Hyperledger. These institutional blockchain projects cut across both financial and nonfinancial distributed ledger technology (DLT) utilization. Presently, there are pilot projects geared toward identification systems, supply chain management (SCM) and provenance, to mention a few.
“Iran Warns Crypto Miners About Potential Power Outages”
The latest country that became attractive for cryptocurrency miners in the past year has been Iran. The average price per kw/h had been $0.03 for the past year. Which is significantly lower than other countries that have a significant mining industry (USA $0.12, China $0.08 – 2018) However, the state-run power company Tavanir cites a 7% increase in energy prices since last year. The main reason: cryptocurrency miners. As a consequence of this, Tavanir has announced that it is going to cut power supply to cryptocurrency miners. The state subsidizes the energy in the country.
“TechCrunch Founder Sells His Real Estate Property On Blockchain”
Propy, a blockchain based real estate platform, announced the sale of a $1.6 million San Francisco property owned by the venture capital fund CrunchFund, co-founded by Michael Arrington. The announcement follows news of Propy’s highest cost transaction to date, a $2.4 million duplex in San Francisco, completed entirely on the platform. Propy is a real-estate transaction platform that empowers buyers, sellers, their agents, and escrow agents to close a traditional real estate deal entirely online. The purchase offer, payment and deeds are uploaded to an immutable blockchain.
Tweet of the Day
Dan Hedl
There will only be 21 million Bitcoins.

What happens when 7.52 billion people realize that?
Today's Top Reads / Podcasts
Overnight Performance of Top 10 Currencies
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