It was always bloody stupid rallying into a war with Uncle Sam but there you go. BTC gave way last night and has nasty double top pattern:
US hearings were not kind, via Forbes:
Facebook previously announced plans for launching a new cryptocurrency, Libra. The company didn’t, however, discuss how this new digital currency could completely change and shake up the banking and financial establishment. Facebook CEO Mark Zuckerberg downplayed the new currency, claiming that it will be governed by a regulatory body in Switzerland and has a number of well respected participating institutions behind it.
Many doubt his assertions and believe that this is a power play to further grow his company and its span of control. If the billions of people who use Facebook decided to conduct transactions with Libra, it would jeopardize the United States and other country’s currencies and financial systems. While lightly covered, having one extremely powerful company control the flow of money, U.S. currency could suffer serious repercussions. Politicians slowly awakened to this danger and demanded that Facebook executives meet with congress.
It seems that Democrats and Republicans alike finally agree on something—the threat Facebook’s new currency will have on the country. Tuesday, Facebook found itself once again under fire from Congress. The Senate Banking Committee grilled Facebook executive David Marcus—as CEO Mark Zuckerburg smartly avoided a return trip to the woodshed—concerning the company’s plan to launch its digital currency.
The members of Congress did not look fondly on Facebook’s new initiative. Senator Sherrod Brown openly professed his displeasure and claimed that “through scandal after scandal…it doesn’t deserve our trust.” Brown said, “We’d be crazy to give them a chance to let them experiment with people’s bank accounts.” He further added that it was “delusional” for customers to trust Facebook with their “hard-earned” money. Other senators shared their concerns. “I don’t trust you guys,” said Republican Senator Martha McSally. “Instead of cleaning up your house, you are launching into a new business model,” she complained.Marcus, who was formerly a high-ranking executive at PayPal, tried—without much success—to get Congress on his side. He promised that Facebook would not begin offering Libra until important regulatory issues are dealt with.
Its existence is the regulatory issue. It will give Facebook the power to create money. What’s it going to do next, launch an aircraft carrier? Libra is buggered. It’s too big to succeed.
Some have tried to spin this as a BTC positive, at CoinDesk:
For a panel about a proposed cryptocurrency, Tuesday’s Senate Banking Committee hearing was notably light on crypto talk.
Bitcoin was barely mentioned during the two-hour session and most of the lawmakers seemed far less concerned with the technology than with who was planning to leverage it: Facebook.
Sen. Brian Schatz (D-Hawaii) put it perhaps the most succinctly. Responding to Facebook executive David Marcus’ oft-repeated talking point that the Libra project was important for the U.S. to avoid being left behind in the blockchain revolution, Schatz said: “You’re making an argument for cryptocurrencies generally. … The question is not, ‘Should the U.S. lead in this?’”
Rather, he said, the question is: Why Facebook?
“Why in the world, of all companies, given the last couple of years, should [Facebook] do this?” Schatz asked, referring to the social media giant’s data-privacy and election-meddling scandals.
Crypto savvy
Similarly, the remarks from Sen. Kyrsten Sinema (D-Ariz.) about cryptocurrency were FUD-free.“Despite granting anonymity, cryptocurrencies aren’t the first choice for drug traffickers … because cryptocurrencies aren’t easy to use,” she said.
Sen. Chris Van Hollen (D-Md.), likewise, sounded much less worried about the granddaddy of all cryptos than about Facebook CEO Mark Zuckerberg’s new brainchild.
“The volatility of bitcoin … means it won’t be put in widespread use. While [Libra] is supposed to be put into wide use,” Van Hollen said.
Another difference is that unlike bitcoin, where there is no central issuer claiming to have assets backing the currency, “you do have to trust the Libra Association,” Van Hollen added. “When you’re talking about the world currency I’m not sure if there is sufficient sustainability.”
And Marcus, for his part, did little to invite comparisons between Libra and bitcoin, instead positioning the project as a path to financial inclusion for underserved populations.
“Our first goal is to create utility and adoption, enabling people around the world – especially the unbanked and underbanked – to take part in the financial ecosystem,” he said in his opening statement, which made no mention of bitcoin or cryptocurrency.
In contrast to bitcoin’s radical promise of a capped money supply invulnerable to political influence, Marcus said Libra, governed by a consortium of tech, VC and payments companies, had no such ambitions.
All we are doing here is underlining exactly why NO crypto currency can ever succeed. The moment it does, it fails, as it threatens the existing monetary order. Those who think this is viable are smoking crack. When the rubber really hits the road, it is the government’s monopoly on violence that backs the currency’s value.
Still, it can be argued that BTC did not crash (only) owing to the hearings. Gold also fell and if BTC is digital gold then it’s still rational that they fall together:
But I wouldn’t bet on it!
