Bitcoin is taking a hit this morning and fell over 8% to below $9,800. Here is the key driver.
Tech giant Facebook (NASDAQ:FB) announced in June that it was going to launch its own cryptocurrency named Libra and ever since the announcement, the crypto market has been in a bit of turmoil. It attracted attention from top regulators in the United States and even the United States President Donald Trump criticized the project in one of his tweets.
The uncertainty resulted in fluctuations in the price of Bitcoin and affected the wider crypto market as well. Regulators expressed their misgivings and doubts about Libra last month. However, today it has emerged that the traditionally tough antitrust regulator of the European Union, the European Commission, has opened an investigation into Libra.
While it is true that the crypto sphere is famously free from most regulation, the issue is slightly different when it comes to Libra. The European Commission believes that since Libra is going to be heavily dependent on consumer data as well as information from users, it could create ‘competitive restriction.’ Such a situation might lead to the marginalization of rivals, and that is what the preliminary investigation is going to look into. In addition to that, the integration of the Libra wallet onto both Facebook Messenger as well as WhatsApp has also become a matter of interest for the antitrust regulator.
The latest setback for Facebook’s Libra has naturally had an effect on the crypto market, and after the news hit the wires, the price of Bitcoin dropped promptly. The token dropped by as much as 8% once the news was published and it remains to be seen whether the regulatory problems being faced by Libra becomes a bigger millstone around Bitcoin’s neck or not. Last month, Bitcoin dropped in price as soon as Libra got a setback and pattern seems to be continuing this month. Bitcoin and the wider crypto market has been in decline over the past 24 hours.
Featured image: DepositPhotos © sdecoret