Get the weekly summary of crypto market analysis, news, and forecasts! This Week’s Summary The crypto market ends the week at a total market capitalization of $1,165 trillion. Bitcoin is up by over 2% after a rollercoaster of a week. Ethereum decreased by almost 1% over the past seven days. XRP gained more than 15% in value this week. Almost all altcoins are trading in the green, with very few exceptions. The DeFi sector decreased the total value of protocols…
Facebook Diem Appears Bullish Amid Speculated Launch
Facebook-backed Diem might launch this year based on a recent report. The report, citing a source undisclosed, said the Diem Association plans to launch a small pilot with a single “stablecoin,” pegged to the US dollar, later this year.
The association has indicated that it has relocated its significant activities to the United States from Switzerland. It has also withdrawn its application to the Swiss Financial Regulator for payments.
CNBC also said that if Diem’s pilot is introduced this year, it will be centered on individual purchases and enables products and services purchases between individual users.
Bullish Sentiments from Facebook’s Diem
Facebook (FB) first proposed the Libra as a universal digital currency in 2019, linked to various currencies, including the euro and the US dollar. In 2016, Libra was a universal currency. However, FB was vehemently opposed by financial regulators all over the world to this initiative.
The move made the organization that oversees the Libra project known today as Diem lose its backers, including MasterCard (MA) and Visa (V). It forced Diem to opt for multiple ‘stablecoins,’ supported by various government-supported currencies and one multi-currency coin.
Cowen analyst John Blackledge increased the price target from $350 a week ago to $360 (upside 18.9 percent) and reiterated a Facebook purchase. After the first quarter of a digital advertising call, Blackledge lifted its figures for FB, indicating increased FB and Instagram advertising revenues.
In the past month, Facebook shares have risen by 7.3%. All in all, the Street is bullish with a consent rating of Strong Buy, based on 30 Buys and 4 Holds. The average price target for the analysts at $344.81 is 13.9% upward of current prices.
According to the Smart Score system, TipRanks, FB has 7 of 10 ratings, which indicates that it will probably perform according to the average market.
Diem is Unique
It is not new to back a currency with an asset. Up until 1971, the US dollar was backed by gold. The Hong Kong dollar’s value is linked to the US dollar and governed by a currency board, which can only issue new notes if it has sufficient reserves.
Diem is pegged to tangible assets, a format often referred to as a stablecoin. It is comparable with bitcoin, ether, and several other cryptocurrencies, which are little to support and wildly swing in response to the speculation.
Diem is entirely digitally available. And, like other cryptocurrencies, Diem transactions are registered on a blockchain software ledger which confirms each transfer. In the early stages, the founding members will run the Diem blockchain. However, it will develop into a completely open framework in the future.