Text | Edited by Carol | Sourced by Tong | PANews.io
Facebook is going to issue a currency called Libra. Recently, domestic and foreign media, both inside and outside the circle, all the media, large and small, have been focusing on this important event.
On June 18, Facebook, an Internet giant with 2.7 billion users around the world, officially announced that it will establish a simple global currency Libra and an alliance chain that aims to become a financial infrastructure to provide financial services to billions of people. Those who are optimistic about Libra believe that it will realize the original vision of cryptocurrency mentioned in the Bitcoin white paper, while those who are not optimistic about Libra believe that the data on the chain will be used for Facebook’s business purposes, and user privacy is still not guaranteed.
PAData analyzed the market data before and after the publication of the white paper, trying to observe, in the short term, how the market digests the news. Is the positive impact of Libra industry-specific? Libra focuses on the dual concept of "payment + stability". Will its entry have an exclusive impact on existing payment concept coins and stable coins?
High-frequency word cloud map about the introduction of the Libra reserve in the Libra white paper
The impact of short-term good news on the whole is greater than that of the concept sector
Before Facebook officially released the white paper, some media had already begun to spoil the content of the Facebook blockchain project, or sort out its development history. Judging from the news, this is undoubtedly the biggest benefit this week.
PAData selects the secondary market data of the week before and after the release of the white paper for analysis. It can be seen that within the week before the release of the white paper, the top 5 by market value (select the top 5 coins in CoinMaketCap on June 20, of which XRP belongs to payment concept, so it is included in the analysis of the payment concept currency, and replaced by the currency ranked 6th in market value.) The mainstream currency generally rose. Especially in the three days before the release of the white paper, except for LTC, which fell on June 16, all other mainstream currencies rose. On the day the white paper was released, on June 18, mainstream currencies generally fell, with an average drop of 2.79%. Investment is based on good expectations. When the good news is exhausted, it is also reasonable for the currency price to fall.
Previously, media analysis believed that Facebook’s cryptocurrency will focus on the payment field, targeting C-end consumers. In fact, as early as 10 years ago, Facebook issued Facebook Credits points, which can be used to buy and sell virtual goods in games. From the perspective of payment, does the good news of Facebook’s coin issuance also have an impact on the existing payment concept coins?
The main currencies of the payment concept, XRP (Ripple), XLM (Stellar), OMG (OmiseGO), MCO (Crypto.com), PAY (TenX) and the mainstream currencies have roughly the same market performance, and they all have differences in the week before June 18 The level rose and fell on the day of June 18. The difference is that the overall average increase rate of the payment concept currency is only 0.61%, while the overall average increase rate of the mainstream currency is 1.41%, which is equivalent to less than half of the overall average increase rate of the payment concept currency, and it is accompanied by more High average amplitude.
This means to a certain extent that the positive news of Facebook’s release of cryptocurrency has a slightly greater impact on mainstream currencies than payment concept currencies. In view of the fact that the current cryptocurrency market is still a market where the "Matthew Effect" is prominent, the stronger positive impact on mainstream currencies can also be considered to a certain extent that Facebook's currency issuance is good for the entire cryptocurrency market, driving the overall currency price. up.
However, the current market conditions are in a bull market, and it is difficult to attribute the general rise in the week before June 18 to the single good news that Facebook will issue coins.
A senior cryptocurrency investor told PAData, "Although the recent wave of market prices is not entirely due to Facebook, it must be related to Facebook when BTC breaks through the $8,000 mark (indicated by the red circle in the figure below). Yellow arrows) turned sideways (indicated by red squares) and then turned into upward waves.”
The picture shows the daily K-line chart of the BTC/USDT trading pair on Binance Exchange
Here, although some media revealed earlier that Facebook’s cryptocurrency will appear in the form of stablecoins, since stablecoins are mostly trading intermediaries and do not have investment attributes, PAData did not include the market performance of stablecoins in the scope of analysis .
There is no homogeneous competitor, "payment + stability" focuses on C-end consumption
Although the good news of Facebook’s currency issuance has been digested in the secondary market with the official announcement of the Libra white paper, it is foreseeable that the entry of a social giant with 2.7 billion global users will have a profound impact on the development of the entire industry.
Judging from the content of the white paper, Libra's actual assets will be "a series of low-volatility assets, including cash and government currency securities provided by a stable and reputable central bank", which is essentially a stable currency anchored to a basket of fiat currencies.
Looking at the current cryptocurrency market, there is no doubt that USDT has always been the "leader" in the stable currency market, with a market share of about 80%, and has remained stable at this level for a long time. Other emerging stablecoins such as USDC, TUSD, PAX, GUSD, DGX, EURS, nUSD, DAI, etc. are also eyeing.
The most mainstream stable currency in the current market is the stable currency anchored to a single legal currency, that is, the stable currency is always 1:1 exchanged for legal currency. Its main purpose is to provide a secondary market trading medium for users who cannot directly use legal currency transactions, such as USDT, USDC, TUSD, PAX, GUSD, etc. are all of this type. The competition of these stablecoins is mainly channel competition. Whoever can list more exchanges and open more trading pairs is likely to get more traffic.
But Libra is very different from the current mainstream stablecoins in that Libra is anchored to a basket of legal currencies, "so from the perspective of any specific currency, the value of Libra will fluctuate", that is, Libra does not It cannot always be exchanged for a fiat currency at a fixed rate. Although Libra also allows "authorized dealers to integrate into exchanges and other institutions that buy and sell cryptocurrencies to users, and help users convert between cash and Libra", as a trading medium, it is clear that Libra with a floating exchange rate is not as good as the current exchange The stablecoins in the market, and this is not the goal of Libra.
A key goal of Libra is to "give billions of people access to a low-volatility cryptocurrency that can be used from day one globally as a low-entry medium of exchange, and that supports new digitally native technologies such as micropayments." Use.” It is not difficult to see that Libra’s ambition is to become a micropayment currency for billions of people, or a means of payment for billions of people when they consume.
This is actually different from the current cryptocurrency that focuses on payment and settlement. For example, XRP and XLM, the two largest coins in the payment concept, are currently focusing on the B-end market.
Emi, Ripple's global operations director and head of the Asia-Pacific region, publicly stated at the Money20/20 conference held in November 2018, "Ripple was the first company to focus on blockchain enterprise-level applications, but XRP is an optimization layer and the platform for cross-border payments." The core layer still uses legal currency for settlement.” Stellar (XLM), which has reached a cooperation with IBM, established World Wire. As of March this year, banks and financial institutions in 72 countries have joined the network, and the number of legal currencies supported has reached 48.
And JP Morgan, which announced the release of the US dollar stable currency JPM Coin earlier this year, is mainly targeted at JP Morgan's high-net-worth customers, basically out of reach of ordinary people.
Therefore, according to Libra's positioning, there are no homogeneous competitors in the current cryptocurrency market. As a stable currency, USDT has no actual offline use cases, but Libra is backed by Facebook Massager, Instgram, WhapsApp, eBay, Uber, and offline use is just around the corner.
According to Wang Yongli, the former vice president of the Bank of China, it is impossible for cryptocurrency to replace and subvert legal currency as a currency in the business circle, and its value mainly depends on the value of the business circle. How much power Libra will eventually play depends largely on the products of the association members. As Bloomberg News said, if most of the things consumers buy online are priced with Libra, then they will naturally tend to use Libra.
On the other hand, stablecoins and payment currencies that may face strong competition from Libra are also seeking new breakthroughs.
Ryan, head of TUSD Asia Pacific, told PANews: "TUSD is also exploring new use cases such as remittances. I think TUSD and other stablecoins need to really open up one or two vertical markets (as offline application cases)." OmiseGO A related person said: "The release of Libra will definitely have some impact, but I think we are all facing similar problems at the moment. At the same time, we are also exploring different scenarios in the support field."
Therefore, this is ultimately a battle between scenes and users.
