Facebook share price jumps 4.24% in anticipation to its crypto announcement
Coined as a “stablecoin”, the value of the currency will reportedly be pegged to a basket of global currencies, including the United States dollar and the Euro.
Social media giant Facebook Inc’s shares rose 4.24% on Monday as investors and analysts showed optimism on the firm’s upcoming cryptocurrency offering.
The company will be revealing its cryptocurrency whitepaper today (18 June, 2019) in a highly anticipated announcement. The firm is said to be creating a digital currency and planning to set up a digital payments system in about a dozen countries by the first quarter of next year.
Coined as a “stablecoin”, the value of the currency will reportedly be pegged to a basket of global currencies, including the United States (US) dollar and the Euro.
Facebook share price: technical view
Shares of Facebook rose 4.24% or US$7.68, to close at US$189.01 on Monday. Pre-market trading on Tuesday showed the stock rising 1.20% or US$2.27 higher, at US$191.28.
Year-to-date, Facebook shares have risen by 39.3%, from US$135.68 on January 2, 2019.
Facebook’s cryptocurrency has backers including Uber, and PayPal
Last week, Facebook was reported by The Wall Street Journal and media outlets to have partnered with more than a dozen companies including tech firms like Uber, Visa, Mastercard, and PayPal on its cryptocurrency-based payment system.
Each firm will invest around US$10 million in a consortium that will govern the cryptocurrency, and the money will be used to fund the creation of the coin.
Facebook’s “stablecoin” cryptocurrency
Broadly termed as Facebook’s GlobalCoin, the internal codename for Facebook’s cryptocurrency project is called Libra.
Details on the cryptocurrency and how it will be used as a digital coin is still scarce for now, but with the launch of the whitepaper, more information such as its use case and the functionality of the cryptocurrency will be elaborated.
Analysts are bullish on the cryptocurrency, as Facebook’s mass consumers of over two billion has the potential to take a cryptocurrency mainstream. The new cryptocurrency could also create new sources of revenue outside of Facebook's main digital advertising business.
Other than Facebook, other social messaging apps have dabbled into the cryptocurrency space.
Japan’s messaging giant LINE launched its own cryptocurrency in August last year, issuing LINK tokens for users to collect when they participate in applications on the firm’s network.
LINE also has a cryptocurrency exchange called BITBOX for its users to trade cryptocurrencies which it launched in September last year.
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