Bitcoin has been on a bullish rally since the beginning of the year. After the Facebook cryptocurrency white paper was released, however, investors doubled down on buying Bitcoin allowing the cryptocurrency to retest last year’s highs. Even if the price of BTC corrected after that, it surged again a few days ago, breaking the resistance at $13,000, and $13,500 as it set sights on the $14,000 level. Unfortunately, Bitcoin’s rally was cut short after Jerome Powell expressed concerns about the Facebook cryptocurrency. This led to a panic sell-off and a drop in the price of BTC.
Jerome Powell Talks About Facebook’s Libra, Bitcoin’s Price Rally Is Cut Short
There have been many debates about the Facebook cryptocurrency ever since the social media giant announced that it was diving into the cryptocurrency space. However, the fact that these recent concerns came from the Feds is what led to the panic sell-off. Powell, during a congressional meeting yesterday, said;
“Facebook’s Libra raises issues about consumer protection, money laundering, privacy, and financial stability among others. These concerns must be addressed publicly and thoroughly.”
Powell didn’t just suggest that the concerns should be addressed. He suggested that the tech giant puts a clip on the project until these issues are addressed. He said that the Feds have already put a group together that is dedicated to examining Libra.
Unlike Bitcoin, Libra is going to be a stable coin that would be pegged one-on-one to fiat money. The tech giant announced that the project is going to be backed by government debt securities as well as currencies. While the effect of Libra on the global economy is not yet clear, one thing is certain, it is going to pave the way for global adoption of cryptocurrencies.
Right after Powell’s comments, the price of Bitcoin fell by more than 12% diving back into the $11k level. The sell-off was significant because it coincided with the market correction.