Posted 1 year ago | by Ben Armstrong

Facebook’s Crypto Boss is Hot for Bitcoin

Social media giant Facebook is planning to launch new cryptocurrency next year, called Libra, which has made bitcoin and cryptocurrency industry struggle. David Marcus, Facebook's head of cryptocurrency projects, said Bitcoin is "digital gold". Although its extreme volatility being held back, bitcoin is “serves a completely different purpose”.

Speaking at the New York Times DealBook Conference last week, Marcus said:

"I don’t think of bitcoin as a currency...It’s actually not a great medium of exchange because of it’s volatility. I see it as digital gold."

Bitcoin's price has swung over the last few years. It started 2017 at under $1,000 and then rose to almost $20,000 less than 12 months later, and financial regulators could crack down on bitcoin and cryptocurrency investment opportunities.

The Bitcoin Bear

The bitcoin price was heavily sold off last year, although rebounded strongly through the first half of 2019, perhaps because technology companies were beginning to take an interest in bitcoin and crypto.

After Facebook revealed it plans for a bitcoin rival, taken by many as a tacit endorsement of bitcoin and blockchain technology, bitcoin's latest bull run stalled as investors fretted it could lead to an increase in regulation.

U.S. President Donald Trump was one of the world leaders, politicians and regulators who publicly spoke out against Facebook's Libra plans, due to be worries about how it could encourage criminal activities and weaken central bank control of the economy.

Facebook is Hanging in There

Facebook has declared that it would like to work with regulators and governments around the world to create libra and has distanced its project from bitcoin and existing cryptocurrencies.

"(Bitcoin is) an investment class that’s decorrelated from the rest of the market...Why feel threatened by that?" Marcus went on to say that, "People don’t use a unit like the digital currency of bitcoin to pay for things just because it’s so volatile. It serves a completely different purpose."

According to the news early this year, Facebook intended to use libra in parts of the world with less developed financial infrastructure, like a digital currency.

However, Facebook’s Libra project is hitting a rough patch as a handful of the original 28 companies assembled by Facebook to form the Libra Association quit the group and Facebook's CEO, Mark Zuckerberg was recently grilled by U.S. Senators.