Tech Cynic: Facebook's cryptic currency move raises eyebrows
Cryptocurrency

Tech Cynic: Facebook's cryptic currency move raises eyebrows

Those who follow the value of cryptocurrencies will have noticed something odd happening recently. After languishing at a reasonably steady $5,000 Euros per Bitcoin for months, the most widely-known cryptocurrency suddenly leapt upwards in price in May. At the time of writing it's hovering around $12,000, having fallen from a high of just under $13,000. Other digital coinage has followed suit.

Bitcoin briefly touched $20,000 18 months ago, since then the frenetic media interest has lapsed into infrequent stories about it "plunging," studiously ignoring the intermittent gains in the meantime. The message has been clear: "Forget Bitcoin and other cryptocurrencies because they're all just scams to rip off the gullible. You really don't want to get involved. Stick to real money."

This recent spike has therefore come without the irrational exuberance and madness of crowds that accompanied and arguably led the last one. So, what happened?

It's hard to tease out cause and effect in any market, let alone one that by its very nature is mostly anonymous and used by people who would prefer not to have their transactions scrutinised by the conventional banking system. Even so, the timing seems more than coincidental: Bitcoin's rise came about not long before Facebook's announcement of its own pseudo-cryptocurrency, Libra. Libra isn't exactly a cryptocurrency in the conventionally-understood sense, but the resemblance is close enough for many people to sit up and take notice.

Not surprisingly, this move has brought Facebook to the attention of various authorities (again), not least the Bank of England and the US Senate. One can almost picture the conversations between underlings tasked with keeping track of Facebook's activities and the head of whichever organisations believe they have oversight of said activities:

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Alex Cruickshank

Alex Cruickshank has been writing about technology and business since 1994. He has lived in various far-flung places around the world and is now based in Berlin.  

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