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Facebook’s Libra Fuels Demand of Bitcoin as Investors Look for Safety in Alternative Investments

So far this year, bitcoin has risen more than 260%, although it remains below its all-time high of nearly $20,000

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facebook, servicefriend, startup, cryptocurrency, libra
Bitcoin, which has risen in value for eight consecutive days, received a boost after Facebook has said it would offer its own cryptocurrency, the Libra coin by end of June 2020. Pixabay

Bitcoin jumped to an 18-month high on Wednesday, as investors looked for safety in alternative investments amid geopolitical tension, and cheered prospects that Facebook Inc’s Libra token could push cryptocurrencies into the mainstream.

The world’s biggest cryptocurrency has surged in value since April and on Wednesday hit a peak of $13,666.02 on the Bitstamp exchange, the highest level since January 2018.

So far this year, bitcoin has risen more than 260%, although it remains below its all-time high of nearly $20,000 hit in December 2017.

Bitcoin last traded up 14.7% at $13,475.

Facebook, Libra, Bitcoin
Bitcoin jumped to an 18-month high on Wednesday, as investors looked for safety. Pixabay

Facebook to offer cryptocurrency

Investors have flocked back in to digital currencies after a bruising 2018. Bitcoin has risen for eight consecutive days. And now Facebook has said it would offer its own cryptocurrency, the Libra coin, by end of June 2020.

Analysts say Facebook’s announcement this month has revived interest in digital currencies, while investors seeking safety have also pushed up bitcoin’s price.

“Cryptocurrency traders were reinvigorated by Facebook’s launch of their own digital coin and momentum appears to be stirring up fresh new investors,” said Edward Moya, senior market analyst, at online FX broker OANDA in New York.

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“Bitcoin skeptics are cautious in trying to stop this surge and may look for the next key resistance level which is $15,000,” he added.

Way to diversify

With major central banks keeping interest rates near all-time lows, investors have been looking for ways to diversify their portfolios, including through cryptocurrenies, analysts said.

Bitcoin CME futures volumes have also increased in the past few days, as investors look for ways to get their hands on the coin via the derivatives market.

Facebook, Libra, Bitcoin
The world’s biggest cryptocurrency has surged in value since April and on Wednesday hit a peak of $13,666.02. Pixabay

Traders, who have access to both spot and futures markets have been buying the spot and selling the futures, arbitraging the two prices, said Michael Moro, chief executive officer at Genesis Global Trading, which provides over-the-counter digital currency trading for institutional investors.

Increase of 150% since early May

The cryptocurrency has rocketed 150% since early May, along with big rises in other smaller digital currencies such as Ethereum’s ether and Ripple’s XRP.

“It should be noted that this a very different market today than it was in 2017,” said Moro.

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“2017 saw an overwhelming number of ICOs (initial coin offerings), which was very distracting. 2019 has less distractions. It’s also a different space because the CME bitcoin futures product wasn’t available until December 2017.”

ICOs refer to a fundraising scheme that bypasses banks and venture capital firms and involves startups creating their own tokens and selling them to the public. (VOA)

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Here are All The Things One Should Know About Facebook Pay

According to the social networking giant, users do not need to download anything new -- Facebook Pay works seamlessly on the apps they use

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Facebook Pay
Eligible users can set up Facebook Pay by setting it up for use across all Facebook apps individually. Pixabay

Marking its foray into the digital payments system, Facebook has launched a new payments system named Facebook Pay which lets users send money to friends, shop and donate on the social networking platform and Messenger.

Currently available in the US, it will be expanded to Facebook-owned Instagram and WhatsApp later.

It is not yet clear if Facebook Pay will launch in India as Facebook’s plans in the country are focused around WhatsApp Pay as it has a massive WhatsApp user base in the country. However, it hasn’t been introduced so far due to regulatory issues.

It is also not known if both Facebook Pay and WhatsApp Pay will be introduced in India.

According to the social networking giant, users do not need to download anything new — Facebook Pay works seamlessly on the apps they use.

Mobile billing will also be a mode of payment on the platform, said the firm’s payment terms.

“Getting started is quick and easy. Simply add your credit card, debit card, or PayPal, and you’re good to go,” the company said in its support page.

Eligible users can set up Facebook Pay by setting it up for use across all Facebook apps individually. They can go to Settings > Facebook Pay, on the Facebook app or website, then add a payment method.

It is pertinent to note that Facebook Pay is also not connected to its proposed cryptocurrency wallet Libra.

The company will not charge a fee from the users for sending and receiving money via Messenger app.

Facebook Pay
Marking its foray into the digital payments system, Facebook has launched a new payments system named Facebook Pay which lets users send money to friends, shop and donate on the social networking platform and Messenger. Pixabay

Facebook may, however, subject users to fees from third parties for reversal charges or insufficient funds if attempted payments are rejected.

Users who are under 18 will not be able to use the peer-to-peer (P2P) payments service on Messenger.

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P2P is also not to be used for business, commercial, or merchant transactions. The company will discontinue payment services if it notices such prohibited transactions. (IANS)