If the private network, such as Libra and others, is audited, some users may not know what to expect from the public network; such as Bitcoin. President Trump’s comments have affected users’ opinion too.
The cryptocurrency market analysis firm Sfox conducted a study related to the dominance and volatility of Bitcoin. According to the investigation, these characteristics increased during July, just when the United States Congress held hearings with the Libra team, the digital payment method of Facebook.
However, the analysis indicates that the price of Bitcoin (BTC) fell after the hearings to Libra by the US Senate, in which the creators of Libra were presented on July 16th and 17th.
Another possible event that influenced the price of BTC is the influence of the statements issued by the US President Donald Trump, who stated through his account on the social network Twitter last July 11th, that he rejects the new project of Facebook, as well as all cryptocurrencies in general.
“The price to buy Bitcoin has steadily declined since the start of the Libra scrutiny by the US government. It declined from USD 12,483, on July 10th, (before Trump’s tweet) to USD 9,543 on July 17th (the day of the hearings in the Libra Congress). A decrease of almost 24%”, Sfox analysts explained.
As part of the study, the analysts compared the movements of the price of BTC with the date of publication of the information about the hearings to Libra and the publication of President Trump’s opinion.
Increasing in Only Seven Days
The study explains that Bitcoin volatility increased in a short period of time and went from 89.33%, on July 10th, to 100.30% on July 17th. In addition, the study mentions that it is the first time that the historical volatility of the cryptocurrency exceeds 100% since March 6th, 2018.
About the reason why Bitcoin volatility is increasing, the Sfox team explains that the market probably does not fully understand the implications that it can bring for a public blockchain, such as Bitcoin, the scrutiny of the US government towards the chain of blocks contemplated for Libra, which is private. That is, if the private network is audited, some users may not know what to expect from the public network.
Analysts also observed the performance of Bitcoin and other cryptocurrencies. According to the latest data, Bitcoin was the center of attention during the government scrutiny to Libra. Something that did not happen with altcoins, such as Ether (ETH), Bitcoin Cash (BCH), Litecoin (LTC), Bitcoin SV (BSV), and Ethereum Classic (ETC). These cryptocurrencies “were less correlated with BTC than in recent months, while all altcoins were highly correlated each other”.
The report explains that investors are more in tune with Bitcoin than with the rest of the altcoins, especially when the cryptocurrency sector is the center of public attention. This is because some users believe that regulators will address the laws surrounding BTC, rather than the sector as a whole.
The specialized firm eToro also conducted a study about Bitcoin, in which it found that whilst 58% of US adults have heard about Bitcoin, 16% of people already know Libra, despite Facebook’s digital asset is more recent. Ethereum, meanwhile, has only 12% recognition, and smaller cryptocurrencies, such as Ripple’s Litecoin and XRP, are less known by users.
By María Rodríguez