Congressional hearings on Facebook’s Libra took major cryptocurrencies on a wild ride last week. After tumbling early in the week, most major cryptocurrencies recovered, with Bitcoin losing just 2.42% of its value, while XRP and LTC edged higher.
**As of 7/21/19, at 6.30 a.m.
The broader market remained under water, with 65 out of the top 100 coins trading lower, and 35 higher.
Number of Cryptocurrencies That Advanced/Declined In The Top 100 Ranks
Source: Coinmarketcap.com 7/21/19, at 6.30 a.m.
Cryptocurrency markets have been caught in a tag war between those who fear that political establishments will crush Bitcoin and altcoins, and true believers, who think that technology will prevail.
“Recent price action in bitcoin and altcoins has been dominated by the US Administration’s negative comments on both Facebook Libra and cryptocurrency in general,” says. Iain Wilson, Advisor at NEM Ventures, the venture capital and investments arm of the NEM blockchain ecosystem.
These comments have demonstrated a rare unity among Republicans and Democrats against cryptocurrencies. “Both Democrats and Republicans can unite around a shared view that crypto lessens the reach of the US political establishment,” continues Wilson.
For official reasons that range from national security concerns and investor protection to liquidity. And unofficial reasons, like the fear of losing the monopoly on printing money, and the ability manipulate the economy, as discussed in a previous piece here.
And they have the means to make sure that it doesn’t happen. “Whilst most players tend to think banning bitcoin won’t be possible, clearly the US can squeeze fiat on-ramp and restrict the demand for crypto in general.”
That will certainly be bad for blockchain innovation in the US, according to Wilson. “We tend to think that ultimately this would be detrimental to US tech leadership as many projects have distributed global communities and teams.“
Meanwhile, cryptocurrency markets will face a “cold war” by the political establishments around the world, which will cool investor hype.
And that may not be a bad thing.