Since Facebook’s announcement about the development of its own cryptocurrency called Libra in June, the cryptocurrency industry has struggled with many obstacles regarding its launch next year.
Consumers are hesitant about the social media giant taking over a financial venture, claiming that tech companies should be utilizing the given cryptocurrencies in the crypto market like Bitcoin(BTC)trade instead of creating their own centralized substitute. Some social media companies like Twitter are already doing this.
David Marcus, Facebook’s head of the Libra cryptocurrency project, has drawn parallels between Bitcoin and gold. At a conference of the New York Times DealBook last week, Marcus said that he does not view Bitcoin as a currency. The comment was followed by a statement that Bitcoin is not a great medium of exchange due to the unpredictability of its value and its instability in the market.
Although consumers are wary about Bitcoin due to its rapid fluctuations, he stated that Bitcoin serves an entirely different purpose. Marcus believes that although it is not the best platform for digital monetary transactions, but he still sees it as “digital gold.”
Previously, many people have drawn similarities and compared Bitcoin with gold, as Bitcoin investors hoping that one day the largest cryptocurrency would exceed the colossal market value of gold currently estimated at around $8 trillion. Presently, the entire market capitalization of Bitcoin sits at about $160 billion, fifty times less than that of gold. Nevertheless, the head of the Libra cryptocurrency project believes that Bitcoin will eventually become a popular reserve as well, just like gold.
David Marcus Acknowledges Bitcoin’s Instability and Volatility
Bitcoin’s instability and unpredictable nature has caused concerns that regulators might place restrictions on it and other digital currencies altogether. The price of Bitcoin rose rapidly from the beginning of 2017 when it was at about $1,000 to almost $20,000 at the end of the year, but then it dropped drastically to about $3,200 in 2018.
The BTC price and other digital currencies began to rebound strongly earlier this year after being sold in masses the year before as news outlets started reporting that many prominent technology companies were taking a keen interest in developing their own cryptocurrency after observing the growing popularity of Bitcoin and others.
Market watchers of Bitcoin and other digital currencies were optimistic that prices would bounce back as the market grew but so far nothing of that sort has happened as Bitcoin reached nearly $13,000 this year and is now traded at around $8,700. This was acknowledged by Marcus when he talked about Bitcoin’s volatility at the conference; Bitcoin is making daily market fluctuations far more than the traditional fiat currencies, stocks or commodities.