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Investor Insights Blog|Facebook Cryptocurrency: Libra

Cryptocurrency Investing

Facebook Cryptocurrency: Libra

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.

There is still the ability to create a major change in price based on news, i.e., just by Libra coming out, we saw Bitcoin go from the high 6000s pushing above 13000 then falling back down below into the 9000s again and now climbing its way back up to 1250 after we get stabilization from that initial news.

Roger Bryan, Cryptocurrency Investing Expert

So you do need to look at that and try to examine what happened then versus what happens, what’s going on now. There is more regulation in place. There is less ability for fake news to be disseminated, although there is still some. There is still the ability to create a major change in price based on news, i.e., just by Libra coming out, we saw Bitcoin go from the high 6,000s pushing above 13,000 then falling back down below into the 9000s again and now climbing its way back up to 1,250 after we get stabilization from that initial news.

Good news and bad news can directly affect the price of these assets a lot more than they can in normal equity in the public markets. As Facebook pushed this news out, we saw the prices go up. Then regulators came out and asked Facebook to put a hold on this project and the prices came down. Not necessarily a direct correlation to the actual use case of value proposition of Bitcoin or some of the other assets, but an effect nonetheless.

Each month we like to dive into what’s going on with some of the other projects that are available through the Equity Trust Digital Asset Platform. We’ve talked a little bit about Bitcoin. It’s a ride on the Libra cocktails for right now in price fluctuation. Ripple or XRP has made some major announcements and some strides to do more large scale banking transactions, cross border payments successfully into establish more partnerships.

There was a conversation about whether or not something like Libra could be a challenge to XRP and really their focus in one into the consumer side of the world out of the gate, although getting the backing of some major financial institutions that could potentially leverage it for other things. Regulation of course being a key question there. Does still give XRP a run rate that gives it some future opportunity.

I did see that in the private markets, Ripple Labs, which is the company, doesn’t own XRP but it’s kind of the controlling element of XRP from a lack of a community base, is raising capital. Again, they haven’t raised since 2017.

The multiples are a little ridiculous, but there’s still a lot of excitement behind that project. The multiple being ridiculous is my own personal opinion and not that of anyone else.

Ethereum, which got its ride in 2017 off of the ICO craze, has been making a good strong foothold in the STO craze. ICO being initial coin offerings, which are definitely out of vogue now, into the STO, the securitized token offerings, which are becoming more popular. A lot of them are being built on the Ethereum blockchain. Some of them are being built on the Tassels blockchain or some of the other smaller private blockchains that are being launched by the individual organizations that are bringing those offers to market.

One of my favorite, personal favorite, and that is tZERO, which has made recent announcements to list its second asset on its asset management platform and then also Tassels, which has won some recent bids to use their blockchain in the financial sector for some potentially very large projects.

One of them, kind of odd, is doing a race for the Atari movie, which I thought was interesting. So, a lot going on there.

Litecoin was actually one of the best performers so far this year coming into July of 2019, and it almost tripled in value outpacing all other assets, macro assets in the cryptocurrency markets. It has kind of stabilized and lost a little bit of its height from that cycle, but it’s still a strong underlying asset that should be part of any portfolio. Again, my personal opinion and not that of any of Equity Trust’s team or their partners in the dissemination of this newsletter.

The other two assets to kind of roundup the top, which are Bitcoin Cash, has really had a lackluster performance since its fork a couple months ago, and then also looking at, there’s one other one, Ethereum Classic, which is, we’ve talked about it in previous newsletters, has really lost nearly all of its momentum in its development team behind it, and is really not a great value add to anything.

We’re looking for strong growth out of Bitcoin going into the rest of the year based on my personal opinion, our team’s personal opinion and in our research in the markets. A lot of that could be carried by Libra. It could also be pushed down by regulators as they react to Libra. You’re going to see a lot of great articles in this month’s newsletter about Facebook going out and get their bid license in the state of New York, which is a big part of putting tokens into the market.

There is a lot of talk about them wanting to bring a regulator into their team in order to head part of the regulatory department to get that closer connection to things. All of those are great opportunities for the overall market. So when you round out where you’re looking this month for potential growth going into the start of Q3 and the end of Q4 if you’re looking it on an annualized basis, we love Bitcoin.

Looking at Ethereum, we’re looking a little bit at Litecoin, but we’re missing some additional forward momentum on it, and XRP as it continues to push out its partnerships and deals, looking for things that they could do to address the circulating supply, potentially with an increase in burn or further lock up or burn held assets.

There’s a lot going on in the markets. For those of you that have been watching this report for the last six months, it’s been one heck of a fun ride.

As we look at the value of our portfolios continue to increase, and we continue to look at how we can participate in the markets either directly through the macro assets or by leveraging the funds in our IRAs to invest directly in private fundraises being done for the companies that will run this industry 20 years from now or the projects that are being run on their blockchain.

Roger Bryan is the founder of Digital Currency Index, a cryptocurrency investing expert and leading advocate of blockchain technology.

Roger Bryan is not an employee of Equity Trust Company. Any opinions or ideas expressed by Mr. Bryan are not necessarily those of Equity Trust Company nor do they reflect their views or endorsement. These materials are for informational purposes only. Equity Trust Company, and its affiliates, representatives and officers do not provide legal or tax advice. Investing involves risk, including possible loss of principal.

Prior to making any investment decisions, please consult with the appropriate legal, tax, and/or investment professionals for advice. As a self-directed IRA custodian, Equity Trust Company will not provide investment advice or risk assessment of any investment. The digital currency market may experience a high degree of volatility and clients should consult with an investment professional before any investment is made.

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