Once again, the dynamic of bitcoin price and its volatility is grabbing the attention. Over the previous 10 days, the cryptocurrency climbed up above $9,000 only to rapidly fall below $7,500. Then, again, the price rose above 8,000 and the new gains seem just around the corner. As many analysts have decided again explaining what fuels these changes, it might seem that the shifts are random and enigmatic as they often are.
However, others are pointing to the fact that there might be a small but strong push for the cryptocurrency, like many others in the crypto top tier – the Facebook cryptocurrency. This digital currency, now called Gobalcoin and in some other references, Libra will see its white paper published in a few days time. Some are certain it is a serious validation of the concept of digital currency, coming from one true giant of the modern IT scene. Could the Facebook token and other corporate coins that are inbound actually make one of the biggest services to bitcoin since its creation in 2009?
Facebook Crypto Explained
For over a year, the crypto space has been actively discussing how will Facebook define and present its digital currency ecosystem. In 2018, the company revealed that it was operating a fully dedicated blockchain team. David Marcus, the executive from PayPal and Instagram was behind its helm. But, thanks to strong NDAs, there was almost no other word about the type of project it is pursuing.
This changes recently when Facebook decided to share some of its goals and other information about the project. Globalcoin is supposed to be a cryptocurrency in its own right, which will function as stablecoin that would be backed not just be USD, but a basket of additional currencies. The same move is likely related to the idea of keeping Globalcoin so stable that it will not sway or move because of the tremors in single fiat currency, no matter how big it might be.
When it comes to its use, the coin will be used as a medium of exchange for the waste Facebook ecosystem. It will be available through automated, but physical tellers, online exchanges and even through a defined reward system. Besides this, not much is know. But, with over 100 staff including many dedicated developers, the Globalcoin will surely be a big deal. That is why people are already wondering in what way will the toke impact the crypto economy but especially bitcoin’s adoption and price volatility.
Driving BTC Price Higher
Initially, most voices in the community were from the detractors who pointed to the ability of Facebook to basically take away from bitcoin. This would take place if Facebook would use bitcoin as a counterpoint to its coin’s value. It would offer a centralized and organized mechanism of value exchange while bitcoin is decentralized and of unknown origin. But, many believe that this will not take place.
Some, including Caitlin Long, who previously worked as an executive at Morgan Stanley, believe that Globalcoin will bolster the adoption rates of bitcoin and other cryptocurrencies. This might not happen immediately, but she sees the same occurring eventually as it accelerates the pace of adoption among non-crypto users. Facebook will definitely undertake huge efforts in the domain of educating its users about the principles of crypto assets. All of these presumably will apply not just to Globalcoin but also many other cryptocurrencies, including bitcoin.
Once they get accustomed to owning digital currency, they will try their hand at BTC for one simple reason, Long believes. Globalcoin will not be regulated or finite as bitcoin is. Sure, it will function as a strong stablecoin, but the appeal of BTC is clear – it is a possible long-term investment that pays off almost certainly for those who are not under pressure to sell when the time is bad.
The Casual Investor
The driving force behind this mentality is that of the so-called casual investor. The mindset involves people with otherwise limited or even no investment experience, like middle-class young professionals, taking a small amount of money and using it to buy bitcoin. The act of investment is more akin to a game or esports because the investor is doing it for fun, expecting nothing in return.
Some even compared this with the first-time casino visit by those who neither gamble nor plan to make this into a new habit. However, there is a crucial difference with cryptocurrency investment – the casual investors make their digital wallets and get the funds to the same location. Once there, they become full-fledged cryptocurrency users. Naturally, a big chunk of the same users never does anything with the crypto token, but others do.
Some might use the opportunity of the next price hike and sell, only to brag how they made $140 from $90 or something like that. Others might go a step further and use a piece of the same BTC fund to buy a pizza once again, only to brag. In this process the Globalcoin could be that catalyst that puts more people into this kind of a position, allowing for the expansion of the bitcoin adoption funnel.
There are many other crypto tokens (more or less crypto) that are looking to make a grand entrance to the global audience. In this regard, Globalcoin might be only the most famous one. Will all of them provide the same possibility for bitcoin. It is hard to say. The certain this is only this – all of them provide legitimacy to the blockchain principles that prop up any digital currency.
Furthermore, they do back bitcoin to a point as well, showing those who do not know anything about the crypto tech that this is not some kind of crackpot venture that will only day disappear when someone hits the off button. But, it would be idealistic to think that these corpo coins will open the eyes of millions to bitcoin. Instead, the same cryptocurrency will remain the outlying candidate. Yet, the appearance of things like Globalcoin will still move BTC it a bit towards the center nonetheless.