CFDs and spread bets are complex instruments and come with a high risk of losing money rapidly due to leverage. 78% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Financial market research and analysis

Our analysts have their fingers on the pulse of the world's financial market news.

CFD trading is high risk and may not be suitable for everyone.
Facebook cryptocurrency Libra validates bitcoin
  • Libra will expose 2 billion Facebook users to crypto
  • Stablecoins like Libra don’t compete with Bitcoin
  • Bitcoin back in a bull market

Today Facebook is set to release a whitepaper about its new cryptocurrency dubbed Libra. Libra could mark the beginning of the end of Bitcoin, but we don’t think so. Libra’s release is bullish for cryptocurrencies.

The whitepaper should give specifics about how Libra will function and offer more on its intended usage by Facebook. It is probably fair to assume Facebook will use Libra as a cheaper means of payment on its platform, similar to what it is already doing with WhatsApp in India. Transactions will also be perfectly trackable via the blockchain to aid Facebook in its targeted advertising.

Libra will expose 2 billion Facebook users to crypto

Because of its huge network of over 2 billion users, Facebook products cast a wide net. Libra will breed familiarity of cryptos to a much wider audience. Two billion people will now be much more open to Bitcoin and other altcoins. The situation is comparable to when Amazon began its prime video service and its implications for Netflix. Amazon bringing streaming to the mainstream was a bigger upward force to Netflix shares than any negative effect from competition.

The exposure of this many people to cryptocurrencies should spur regulators into action. The wild-west of unregulated cryptocurrencies has less chance of mass-adoption. Can-kicking big decisions like how to regulate cryptocurrency ETFs are more acceptable while cryptocurrencies are a speculative niche. Regular usage by 2 billion people means regulation of cryptocurrencies is needed asap.

Stablecoins don’t compete with Bitcoin

As a stablecoin, Libra will be tied to the value of a basket of real-word currencies. This means its own value will not be open to speculation. If traders want to speculate on the positive influence of Libra on the world of crypto, the most obvious route is via Bitcoin.

The different properties of a stablecoin compliment rather than compete with cryptocurrencies like Bitcoin, Ethereum and Ripple. Being pegged to regular currencies make stablecoins less volatile and more suited to payment processing. The value of cryptos like BTC and ETH is derived from the eco-system (ie user community and products/applications that drive usage and volume. Michel Harding, a crypto expert and research fellow at Lancaster University says that Libra “Possibly reinforces bitcoins position as a digital gold and makes it less about remittance.”

Crypto architecture being put to use by Facebook increases the likelihood of mass adoption of the other cryptocurrencies and the unique benefits that their ecosystems offer. For example, it is probably fair to assume that decentralisation and privacy will not be features of Facebook’s Libra.

Bitcoin bull market

Bitcoin is back at its highest price in over a year and is up over 140% in 2019. Since regaining 6,000, traders have set their sights on the big 10,000 level. We see the retracement from 9000 to 7500 as complete. The news on Libra is to some extent baked in already but sets a nice backdrop for a push through 10,000.

Bitcoin daily bar chart year-to-date




14-12-2020

GBP jumps on Brexit talks extension
The British pound has jumped in early trading this week after the UK Prime Minister and EU Commission President agreed to extend Brexit talks beyond Sunday. MARKETSThe S&P 500 fell on Friday, wrapping up a losing week, as the outlook for additional fiscal… Read more

10-12-2020

AirBnB IPO today
At its IPO price of $6 per share, Airbnb ABNB, is expected to raise at least $3.5 billion with an initial market capitalization topping $40 billion. MARKETSStocks fell on Wednesday, retreating from the record highs set earlier in the day, as tech shares strug… Read more

9-12-2020

S&P 500 closes over 3,700
MARKETSThe S&P 500 closed above 3,700 for the first time ever on Tuesday as Pfizer started to roll out its coronavirus vaccine in the U.K., lifting hope of the economy recovering in the near future. The Dow Jones gained 0.4% while the Nasdaq Composite clim… Read more

8-12-2020

Global stock market cap reaches $100 trillion for 1st time
The value of all the stocks in the world put together has reached a giant $100 trillion for the first time. MARKETSThe Dow fell 0.69% Monday, led by Intel and broad-based weakness in value stocks as rising Covid-19 restrictions offset optimism over an imminen… Read more

4-12-2020

Pfizer vaccine supply chain problems
MARKETS The S&P 500 fell slightly from record high. Major U.S stocks indices cut gains quickly in the final hour of trading after Dow Jones reported Pfizer now expects to ship half of the doses it had previously planned this year after finding raw materia… Read more

2-12-2020

Dollar Purge Continues
The US dollar dropped to fresh two-and-a-half year lows on Tuesday, with EUR/USD rising above the widely-watched 1.20 handle. MARKETSNews• Stocks in Asia-Pacific were mixed in Wednesday morning trade after major indexes on Wall Street surged to record highs o… Read more

1-12-2020

Bitcoin hits record high
The price of Bitcoin climbed 8.7% on Monday to reach a fresh record high of $19,857.03 - overtaking its previous peak made in 2017. MARKETSNews• Asia stocks rise as the Caixin/Markit manufacturing Purchasing Managers’ Index for November came in at 54.9 — its… Read more

30-11-2020

OPEC meeting starts
Today OPEC+ begin a 2-day meeting to decide whether to begin producing an extra 2 million barrels per day of oil, or delay for another 3-6 months. MARKETSNews• Asia-Pacific markets are mixed this morning while S&P 500 futures are down half a per cent. Ind… Read more