Market Overview

Analyst: Facebook's Libra A 'Benefit' For Bitcoin, Not A Competitor

Share:
Analyst: Facebook's Libra A 'Benefit' For Bitcoin, Not A Competitor

Facebook, Inc. (NASDAQ: FB)'s upcoming digital currency Libra is a "benefit" for Bitcoin, not a direct competitor, Bart Smith, Susquehanna International Group's head of digital assets, told CNBC Monday.

What Happened

Unlike Bitcoin, Libra is a digital token backed by fiat currency held in global banks, with transactions validated by known payment companies like Visa Inc (NYSE: V), Smith said during CNBC's "Squawk Box" segment.

This makes Libra a "stable coin" that uses blockchain technology to facilitate cross-border transactions.

Facebook can target 2 billion users with Libra, and if a small percentage of people better understand the differences and similarities with Bitcoin, then the original cryptocurrency will benefit from the increased attention, he said.

Why It's Important

Facebook isn't looking to compete with Bitcoin, Smith said; initial details about its cryptocurrency suggest it is looking to compete with Paypal Holdings Inc (NASDAQ: PYPL)'s Venmo, the analyst said.

Bitcoin's recent momentum has little to do with Libra, he said.

Rather, many investors were attracted to Bitcoin after it broke through a resistance level of $9,000 and the psychological barrier level of $10,000, Smith said. Another potential reason for the recent momentum: bitcoin miners taking some profit above $9,000 to reinvest in their mining operations.

"Often times we see these headlines, we see the price of bitcoin move and we try to connect the dots where maybe they shouldn't be connected." 

Related Links:

Commentary: Is The U.S.-China Trade War Behind Bitcoin's Latest Bull Run?

Facebook's Libra: What It Is And How To Use It

Latest Ratings for FB

DateFirmActionFromTo
Jun 2019MaintainsBuy
Jun 2019UpgradesNeutralBuy
May 2019Initiates Coverage OnBuy

View More Analyst Ratings for FB
View the Latest Analyst Ratings

Posted-In: Bart Smith Bitcoin CNBCAnalyst Color Cryptocurrency Markets Analyst Ratings Media Best of Benzinga

 

Related Articles (FB + PYPL)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
DPZMaintains280.0
SCHWMaintains52.0
GWWMaintains291.0
LIIMaintains276.0
SWKMaintains154.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

As Anticipation Firms For Trump/Xi Meeting, Focus Is On Earnings, Iran Tensions

Monday's Market Minute: Is Anything Ever 100% Certain?