- India receives largest-ever FDI in tech sector from Facebook as tech goes bullish in South Asia
- Bitcoin not yet detached enough from traditional markets to explode during financial crisis
The weekend volumes have done little to give us any more insight into how Bitcoin price will perform over the next few weeks, with just over two weeks remaining to the next Bitcoin halving event.
But if we are to look at the general tech sector overall, then we should be breaking out in smiles, especially now that India has just received a USD 5.7 billion investment from Facebook into its largest mobile operator, to make it the tech sector’s largest-ever foreign direct investment (FDI) in the country.
In a report published by Economic Times, Facebook’s deals with digital tech unit of Reliance Industries — owned by billionaire oil magnate Mukesh Ambani — means that the social media giant will own a 9.9% stake in the business, whose services include the mobile network Reliance Jio. The network currently boasts 388 million users, almost 40% of the total country’s population.
In 2019, Reliance Jio Infocomm had installed arguably one of the world’s largest blockchain networks “with tens of thousands of nodes operational on day one”, according to Ambani, which allowed it to successfully complete India’s first-ever blockchain-enabled letter of credit transaction.
Clear signs of Crypto emerging as a popular technology in India
Facebook investing $5.7B in Jio is great news for Indian Crypto ecosystem
👉🏼 FB has Libra
👉🏼 Jio has been working on Blockchain Crypto tech
Libra may become a reality in India ✌️#IndiaWantsCrypto
— Nischal (WazirX) ⚡️ (@NischalShetty) April 23, 2020
The news was well-received by leading lights in the space, with crypto exchange WazirX’s CEO Nischal Shetty saying that this it a clear sign of crypto emerging as a popular tech in a country, hinting even that Facebook’s stalled crypto project “Libra may become a reality in India”.
Jio Platforms also managed JioMart, an e-commerce solution that serves up to 30 million small retailers across the country. Bernstein analysts this week told Business Standard that Facebook would benefit from this investment since it now has access to “a closed network of 388 million users to test on, proof point around the already announced partnership to build and test a WeChat-like app”.
Meanwhile, we now turn to Bitcoin news, where crypto lending platform CEO Alex Mashinsky has come forward to say that Bitcoin has yet to detach from its correlation to traditional markets, making it not quite attractive enough for investors to view it fully as a safe haven asset in these current times of financial crisis.
Speaking on the David Pakman Show, Mashinsky said that Bitcoin did not surge as expected during the current Covid-19 pandemic as there was still a very high correlation between the digital asset and the stock market, at any given time over the past 12 months.
He says that this correlation, and compounded by the crisis, might just be enough to cause investors to turn away from Bitcoin for now, although others have pointed out that gold seemed to be a better correlator than stocks following the Black Thursday event last month.
Mashinsky said that crypto generally still carried an image of extreme volatility, noting:
“Five years ago, BTC looked volatile against stocks… [but now] looks more stable than the stock market — it only moves 2% a day, and the stock market moves 5–10%.”
The CEO then went on to compare Bitcoin with the best-performing stock of the last ten year — Netflix. He showed how Bitcoin was still “2,000 times better”, and how it somehow survived oil’s dramatic crash last week as traders even paid people to take crude oil off their books. He explained it would also improve its fortunes in the long term against fiat:
“Oil is just the first one to hit [due to the pandemic effects on economy]… You’re going to see other industries going through the same type of recycling… A bet on Bitcoin is a bet that the deflationary pressures will win. When everyone gets nervous, they all go to cash, that includes selling Bitcoin, but it’s still one of the best stores of value that exists out there.”
Image Courtesy: Pixabay