The Telegraph manages to ask the top stupid question about Facebook’s new Libra cryptocurrency, should you invest in it? The answer to which being obviously not, for it’s not something that’s going to have a change in capital value, indeed it’s designed not to. Thus investing in the hope of one is going to be something of a mug’s game, isn’t it?
But, you know, the numerate people and the journalists, ever the twain are split:
[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]’Sell Bitcoin… buy Libra’ – should you invest in Facebook’s new digital currency?[/perfectpullquote]Well, no, obviously not. The reason being:
[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]The currency will be serviced by a collective of companies called the “Libra Association”. It functions as what is known as a “stablecoin”, pegged to existing assets like the dollar or euro, in the aim of making it less subject to the volatility that many cryptocurrencies experience.[/perfectpullquote]It’s a stablecoin. It’s not going to have capital appreciation, that’s the whole point of its design. Thus you’re no more going to invest in it than you are a five pound note.
Sigh.
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It is a mix of currencies and facebook is keeping the interest. The holdings are not just cash but "cash like". So perhaps you could invest for the gradual real loss
I've got some one-cent Hong Kong banknotes, which I paid one Hong Kong cent for in 1993. I think they may be worth more than that now.
(Oooo, a quick check shows nice round numbers, 1UKP=10HKP. My thinking of a $2 coin as "twenty pee" and a $1 as "ten pee" has come true.)
Actually it IS an investment instrument and subject to normal income and capital gains tax rules pertaining to FX trading. If you think that the Pound will fall as a result of Brexit then you could sell Pounds for Libre coin. The BoE declared is systemically important - probably for this reason.