Bitcoin (BTC) has been in the middle of a rollicking bull run for 2019 so far, and the virtual currency has managed to touch levels that would not have been thought possible last year. However, the announcement from Facebook about the launch of its own cryptocurrency Libra proved to be a new disruption of sorts in the cryptocurrency space.
While many thought that Libra was going to end up as the major competitor against many digital currencies currently in existence, it now seems that it could be in a bit of trouble with the relevant regulators.
In a new development, the Chairman of the Federal Reserve, Jerome Powell, has stated that he has ‘serious concerns’ about the Facebook-backed cryptocurrency and added that there should be keen scrutiny of Libra. The comments had an immediate effect on Bitcoin, and other major cryptocurrencies as all of them slumped on the back of these comments.
When the most important financial regulator in the world states that he is concerned about a particular cryptocurrency, then it is an indictment on the entire sector, and hence, it was a not a surprise that a massive selloff ensued across the crypto sphere today.
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Sell-Off Across the Board
All the major cryptocurrencies dove today as Bitcoin slumped by as much as 12.80% to hit $11,490, while Litecoin declined by 19% to hit $100.21. On the other hand, XRP and Ethereum sank by 17% and 13.70% respectively. Powell stated that Libra raises “serious concerns regarding privacy, money laundering, consumer protection, and financial stability.” Such a comment from such a powerful regulator is bound to have such a reaction, particularly at a time when most of the world’s major cryptocurrencies are looking for regulatory clarity.
As a matter of fact, Fidelity has even opened up a fund for its institutional investors by way of which they can invest in Bitcoin. However, without regulatory clarity, it could cause a bit of uncertainty.