The price of Bitcoin against the US dollar has just hit its lowest point since May of this year. The drop in the major cryptocurrency was a direct reaction to the statements that were made by Facebook CEO Mark Zuckerberg during his testimony before congress.
The head of the largest social media platform had expressed doubts about the success of his company's Libra cryptocurrency project during the hearing. Zuckerberg's statement immediately caused a decline in investor sentiments within the cryptocurrency industry, dragging down prices in the days that followed.
As of Wednesday, the price of Bitcoin on the Luxembourg-based cryptocurrency exchange Bitstamp dropped by as much as 6.95 percent to $7,471. The dip is a continuation of the cryptocurrency's value decline, which started back in late June. Since that time, Bitcoin has plunged by more than 47 percent.
During his testimony before the US House of Representatives Financial Services Committee, Zuckerberg mentioned that he wasn't really sure if his company's project would really work.
However, the social media mogul did mention that he would do everything he can to make sure that the new digital currency would satisfy all US regulatory concerns.
Zuckerberg reassured lawmakers that he will be closely reviewing the Libra association's planned moves moving forward to make sure that they are in compliance with all regulations.
The Libra project is currently comprised of more than a dozen members, which include large venture capitalist firms, financial tech companies, and a number of non-profit organizations.
Since Facebook's Libra had faced an increasing amount of scrutiny from regulators, some of the members of the associations have expressed doubts about its success. Companies such as PayPal, eBay, Visa, and Mastercard, which were all original members of the Libra project, have since left the association due to fears of possible ramifications if it failed its battle against regulators.
Analysts have stated that Zuckerberg's own doubts on his company's project will have a lasting impact on the entire cryptocurrency space. There is apparently now a growing sentiment that Libra could fail to launch and that regulators could force it to shut down even before it goes live.
Facebook envisioned Libra to become a widely used digital currency that is backed by real assets such as government securities and bank deposits. Since its announcement, regulators have expressed some concerns over its possible usage.
Some regulators have mentioned that Libra could have negative effects on the existing financial system and it could be abused by criminals for illegal activities such as money laundering and tax evasion.
