- Self-Directed IRAs
- Other Tax-Advantaged Accounts
- Self-Directed Investment Options
- How to Get Started
- The Equity Trust Advantage
- Resources for Individual Investors
- Specialized Custody Solutions
- Custodial Accounts
- Alternative Investments
- Innovation & Technology
- Resources for Investments
- About Us
Facebook’s announcement of their own cryptocurrency “Libra” made waves last month. Roger Bryan, a cryptocurrency investing expert, breaks down what Libra is (and what it isn’t).
In his latest cryptocurrency investing insights video, he details how this announcement impacts investors in the near-term and the long-term.
In this month’s video Roger also breaks down the latest news on six popular cryptocurrencies, as well as insights on various blockchain developments.
What is Facebook’s Libra?
There is one question on the minds of every cryptocurrency investor right now and that is, what is Facebook’s Libra and what does it mean for the overall cryptocurrency market? What we’ve seen in the month of June is that with the news of Libra being pushed out, that there’ve been some pretty substantial increases in the value of Bitcoin, Ethereum, Litecoin, and XRP, which we consider to be the core cryptocurrencies on the market right now.
Now there is a lot of other options, but we call them the core because of their market cap, their market penetration and the underlying use case for them. Libra is projected to be a dollar pegged asset that will allow for commerce to be conducted online through Facebook, Facebook’s marketplace, and even into some elements of banking through their Calibra Wallet in order to allow for the unbanked to have access to the overall commercial markets in a much more efficient and trustworthy manner.
At its core, this sounds like an amazing idea. It takes a lot of what other major cryptocurrencies have been set out to do. It is now facing some regulatory hurdles which is to be expected and it doesn’t help that Facebook has been under so much scrutiny for privacy problems over the past few years.
You’ve also seen an uptick in the price of Facebook stock, although if you compare Facebook stock to say the price of Bitcoin over the same time period, you’re looking at one going up 10 percent, yes 10 percent, exactly from around 180 to 192, 196, and then the other one going up about 70 percent from the $6,000 – $7,000 range touching about $12,000 as of today.
So it still shows where the best investment opportunity is based on historical movements over the past 30 days. That’s data that is not the opinion of myself or the opinion of Equity Trust. That just a pure empirical data.
When you look at the different opportunities that Libra is going to create for the marketplace, this is where this becomes more important. When you look for the need for mass market adoption and you look for the inter-exchangeability of a Libra token through the Calibra Wallet potentially into Bitcoin, it does give you the opportunity to leverage a USD based pegged value currency which could be pegged to other currencies in other markets depending on how exchange rates are going to work there.
At the very least, it is a local market denomination settlement process that would allow you to bring your US dollars into the market, buy the Libra token sometime in 2020, use it for commerce, either buyer or seller, and then take that currency back out into your local currency creating a medium of exchange that allows for across-border commerce in a much more efficient manner.
When you look at that is also creating an opportunity to be able to exchange those tokens for Bitcoin. You look at bringing in over a billion net new users right out of the gate into the cryptocurrency markets. Albeit, I’m not saying that Facebook has come out and said that the Calibra Wallet will have that ability to exchange, but I would look at it as a viable option in the future that would create mass-market reach at a scale that no one else is going to be able to do in any other way.
Well, maybe short of Amazon, but we haven’t necessarily heard that they’re going to do this, just rumors in 2017 early 2018. This gives us one of those trigger points that we’ve been talking about each month in the Roger Report Newsletter, is that mass-market adoption needs to happen in order for these limited supply assets to really become scalable from an asset value perspective.
There’s only a fixed number of Bitcoin that will ever be in the market, so as more people enter into the market and create demand for it, the price goes up. It’s pure supply-demand economics. It’s not an opinion of anyone participating in the dissemination of this newsletter.
What I would say is that, with all of the recent uptake in the price of Bitcoin and some of the other macro assets in the market, there are some comparisons to what happened at the end of 2017.