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Facebook Drives Bitcoin Price

With reports pointing to demand in Hong Kong as a major driver for the recent price rally this past weekend, Bitcoin seems to be set to break the five-figure mark again. Nevertheless, it is always tricky to understand how much of the price is being pushed by speculation and how much of it is legitimate organic growth. Therefore, reports of people buying Bitcoin because of Facebook’s own crypto play and its influence on “onboarding issues,” may amount to another outbreak of Bitcoin Fever.

Separating Wheat from Chaff

Bitcoin doesn’t care about speculation or price either. Organic growth or speculative buyers don’t change what it stands for. If people in Hong Kong are responding to increasingly repressive moves by their government through Bitcoin purchases, then they have discovered what Bitcoin was designed to do. Buying Bitcoin to hedge yourself against government excess is one of the main pillars of Bitcoin’s value, and people around the world should be looking at those in Hong Kong who are reportedly buying to hedge themselves, so they can do the same.

Those who are buying because they see the price going up and they think that Facebook’s own digital currency will reduce friction and allow more people to buy Bitcoin, are missing the point. The mechanics of Bitcoin don’t change just because it is perceivably easier to buy coins once a private company issues their own centralized, digital currency that requires KYC and can be completely censored not only by the government but by the issuer.

Facebook is Just Playing the Role of a Bank

Bitcoin will remain as challenging to keep and transact with no matter how you buy it. Those who find it challenging to onboard now, may find it a little easier to onboard with Facebook’s coin but will not be able to get over the other hurdles. In fact, they will be more exposed if they think onboarding is the real challenge.

Any amount of Bitcoin that Facebook users acquire through that platform’s own digital currency, will inevitably tie their balances to the banking system. Government and companies will be able to trace those Bitcoins back to those Facebook users. In essence, Facebook will just play the role of a bank here. What is the difference between buying Bitcoin through Facebook or buying it at a local ATM or through a bank transfer to an exchange like Coinbase? Maybe just a little convenience.

Looking for Fiat Profit?

Therefore, if you are looking for fiat profit, feel free to speculate with all those who are jumping on Facebook’s digital currency bandwagon. You might make some money, but you might also lose a lot of it. When you play a game of speculators, it is all about inside information and financial muscle. That is a dangerous game to play. It is called Bitcoin Fever and it has claimed victims before.

On the other hand, if you are looking at Bitcoin as an asset that can put some of your savings away from the hands of governments and banks, you will be looking at those reports coming out of Hong Kong without thinking about the price. Instead you will be focusing on acquiring your coins in a manner in which your identity will not be tied to your Bitcoin addresses, and you will be reading more about how to operate within the Bitcoin ecosystem, keeping your own private keys safe. You will be immune to Bitcoin Fever.

Bitcoin Chaser

Here at BitcoinChaser we live and breathe Bitcoin.

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