What the market is saying about Facebook’s crypto foray

In the same week, the policymakers in Washington have waved a red flag threatening Facebook’s plans before they even begin.

The experts at Apollo Capital have discussed the week that was for Libra, including its potential, the currency goals and possible dangers of the new currency holder.

Exposure

The current estimated figure for blockchain wallets worldwide is around 35 million people investing in the digital currency.

Facebook has joined Uber, Stripe, bookings.com, Visa, Spotify to create this currency. Combined, the membership is estimated to be approximately 4 billion members, according to Apollo Capital.

Due to the size of users, Apollo Capital believes Libra only needs to capture a fraction of its market to get monumental change for cryptocurrency.

Goal of Libra

Libra has sent out a message saying it wants a simple global currency and financial infrastructure that will empower billions. The white paper released by Facebook suggests they want to help the 1.7 billion people in the world that do not have a bank.

Credibility of crypto

While crypto assets were held by some of the world’s biggest investment firms, including JP Morgan, Fidelity and Goldman Sachs, it is predicted that Facebook’s inclusion will add to the credibility of the alternative currency, according to Apollo Capital.

Privacy

According to Apollo Capital, cynics of Libra have argued that it’s an attempt by Facebook to capture financial data, which is an advantage to Facebook’s social media platform. Due to Facebook’s past with using data for personal gain, some policymakers are concerned with Facebook adding financial data to its already mass monitoring of users.

Centralisation

What makes blockchain so exciting is its decentralisation from other forms of currency, meaning it can be a hedge from traditional currencies. However, Apollo Capital states Libra is centralised with a proposal to be decentralised within five years.

Reserve

Unlike traditional crypto assets that lack intrinsic value, Libra is backed by a basket of fiat currencies. Crypto asset’s original purpose was in retaliation to the devaluing traditional currencies, stated Apollo Capital.

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About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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