On June 18, 2019, at 11:00 CET, Facebook Inc. made the announcement that it was launching its own cryptocurrency project called Libra. It aims to have a stable value, pegging its rate to a basket of currencies in order to forego the typical volatility of numerous cryptocurrencies.
Libra aims to have low transaction fees and almost-instant transaction times. Furthermore, Facebook has announced that it wants to release Libra in several countries while aiming for global expansion. It seeks to offer a means of transferring money to those in underdeveloped nations that do not have access to financial institutions.
Finally, it will eventually implement custom transactions and smart contracts, ultimately allowing for the creation of dApps (decentralized applications). Therefore, it could be considered a direct competitor to Stellar (XLM) / XRP (XRP) — because of its aims of transferring money across the globe — and Ethereum (ETH), since it shares similarities in the implementation of smart contracts.
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Shortly after the announcement, the prices of all four cryptocurrencies we are analyzing dipped to varying degrees. XRP and XLM suffered the sharpest decrease — the former decreasing by more than 4.5 percent while the latter was closer to 3.5 percent. BTC and ETH were the subjects of smaller decreases of close to two percent.
Since then, however, they have enjoyed a rebound. Bitcoin was the instigator of this upward move at around 19:00 on the same day, while the others followed suit shortly after. At the time of writing, ETH has only decreased by 0.91 percent, while BTC has decreased by 1.30 percent.
XRP and XLM have experienced sharper decreases, at 2.16 percent and 2.39 percent, respectively.
To conclude, the major cryptocurrencies have not been affected significantly by news of Libra. The fluctuations between one percent and 2.5 percent in a span of 24 hour hours are standard in the cryptocurrency industry — and we cannot say, for a fac,t that they were caused by the announcement.
Do you think Libra will have a positive or negative effect on cryptocurrencies? Let us know in the comments below!
Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.