Expectations about Facebook’s cryptocurrency have become a key barometer for the evolution of bitcoin. The forcefulness of the criticism of the US Senate to Facebook’s plans reduces the euphoria in the sector, and bitcoin deflates more than 10%. In three weeks it already loses a third of its value.
Volatility returns to extreme in the price of bitcoin. After an exceptionally ‘flat’ first quarter in price compared to the usual lunges of recent times, the second quarter encouraged a rally that raged in recent sessions.
On June 26, the euphoria of investors over the impact that the launch of Facebook’s cryptocurrency, Libra, would have caused new highs of a year and a half in the price of bitcoin. The virtual currency surpassed $ 13,700, a level that it had not reached since a few days after its historical records, in December 2017, when it reached a boom of $ 20,000.
The escalation of three weeks ago to levels close to $ 14,000 raised the revaluation accumulated by bitcoin so far this year above 250%.
Three weeks later, this percentage drops to 150%. Since June 26, bitcoin has lost a third of its value. In terms of capitalization, the setback is close to 70,000 million euros. In this disaster, in addition, its price loses the psychological barrier of $ 10,000.
The wave of divestments is accelerating in the last hours. The falls exceed 10%, and are triggered by the doubts cast by the US Senate about the launch of the Facebook cryptocurrency. Senators from both the Republican Party and the Democratic Party have seriously questioned the plans of the social network, to the point that Facebook has frozen the launch of Libra until its regulation is clarified.
Representatives of the US Senate have expressed doubts about the ability of Facebook, repeatedly accused of violating the privacy of its users, of becoming global savings treasurer. The criticism from the US Senate joins those recently launched by US President Donald Trump, and the concern expressed by three of the world’s main central banks, the US Federal Reserve, the European Central Bank and the Bank of England.
The demand for regulation jeopardizes the launch of Libra, and doubts about its future again cloud the perspectives on all cryptocurrencies.
The falls not only exceed 10% in the bitcoin price. Losses exceed double digits in other major cryptocurrencies, such as ethereum, litecoin, Eos, stelar, or cardano.
The magnitude of the setbacks among cryptocurrencies exceeds 30% in the smaller capitalized virtual currencies such as the Icon, and are above 20% in Quant, ABBC Coin and VestChain.
The widespread rampage in the cryptocurrency market deflates its combined capitalization to $ 250 billion, a figure similar to that reached just three weeks ago by bitcoin.