Bitcoin price down after Fed Chair Powell’s Facebook Libra comments

Bitcoin is sliding after Federal Reserve Chairman Jerome Powell poured chilly water on Facebook’s plans to launch a cryptocurrency.

The world’s best-known digital coin — which has skilled a meteoric rise in 2019 — fell 12% to about $11,450 on Thursday, in response to CoinDesk knowledge.

Bitcoin had hit a 17-month excessive above $13,000 simply two weeks in the past. It’s at the moment up about 200% for the reason that begin of the 12 months, having gathered momentum as massive firms like Facebook and Fidelity get entangled within the area.

But it started sliding as Powell mentioned that he held “serious concerns” about Facebook’s deliberate digital foreign money Libra. The social community is trying to launch the token alongside a consortium of firms together with Uber and Visa.

“Libra raises serious concerns regarding privacy, money laundering, consumer protection, financial stability,” Powell mentioned at a congressional committee Wednesday. “These are concerns that should be thoroughly and publicly addressed.”

Powell additionally known as for a halt to the undertaking till regulators’ questions on Libra are addressed. The Fed has arrange a working group aimed toward inspecting Libra, he added.

Facebook’s Libra takes the type of what’s often called a stablecoin. These are cryptocurrencies which can be usually pegged to currencies just like the greenback. In Libra’s case, the token is backed by a bunch of presidency currencies and debt securities.

Analysts have been bullish on Libra, a minimum of from the angle that it might pave the way in which for extra adoption of cryptocurrencies. But the Facebook-led undertaking has been clouded by regulatory issues, with central bankers and politicians world wide expressing skepticism.

“It seems that the market wasn’t ready to break a fresh highs just yet, and (bitcoin) is now back near the low end of its most recent range” of $10,000 to $14,000, Mati Greenspan, senior market analyst at eToro, advised CNBC by electronic mail Thursday.

Greenspan added that he was uncertain if crypto merchants have been monitoring Powell’s comments. “This sort of volatility is quite normal for Bitcoin,” he mentioned.

Bitcoin wasn’t the one digital foreign money to drop following Powell’s comments. The world’s second and third-largest cryptocurrencies — ether and XRP — additionally fell. Ether was down 13% at $270 a token, whereas XRP fell 15% to about 33 cents.