Facebook has just devised a payment technology to make online payments or money transfer easier and cheaper for users globally, but many people fear Facebook has gone haywire.
While that continues to be a subject of debate, investors have started looking at how to make money from Facebook Libra currency.
The idea of Facebook currency was influenced by the concern of the social media giant for small businesses and individual Facebook users to have access to financial services on the internet with no costs.
The name ‘Libra’ was gotten from the basic Roman measurement of weight.
Meanwhile, cryptocurrency is a digital currency that has been designed to secure financial transactions online. It is managed by a block-chain of several financial institutions across several borders in majorly two currencies, the dollar and pounds.
It first emerged in the 80s by a computer science student in the University of California.
The technology failed then, but yet created independent digital currencies of which Facebook is set to launch one.
Facebook has though openly spoken that Libra currency is very resourceful as it helps to transfer money from one person to another.
There are 1.7 billion people which the company aims to target when the project is finally launched in 2020. This shows that the technology can make a user do all sorts of financial activities without having the cause to visit a bank or own a bank account.
Aside using the app to transfer funds, Facebook is set to allow users make purchases with it from time to time and to also invest in the technology as a shareholder, which is the area of focus in this post.
So, before we look at how to make money from Facebook Libra currency, it’s crucial to first look at the weight of the new currency in the market.
What You Will Learn in this Guide
Impact of Facebook Libra Currency on Bitcoin Price
Shortly after Facebook announced its intention to launch Libra currency in June 18, the bitcoin price suddenly rose up. Earlier before the announcement, original cryptocurrency was $9,000 but now investors buy at $11,000 in the market.
The price has been increasing gradually since the beginning of April.
And now that the rate has gotten out of control, more investors are showing interest in the new currency as alternative to others.
Bitcoin investors have confidence in Facebook Libra currency not only because it is proved to be more profitable than its predecessors but also because it is backed by reserves such as cash and government bonds.
So, this is the right time to start showing interest.
How To Make Money from Facebook Libra Currency
There are two ways to make money from Facebook Libra Currency:
- Buy Facebook Shares
- Buy Libra
The smart way to buy shares in Facebook is through the use of an online share dealing platform. This include:
- Degiro Share Dealing
- The Share Centre Share Account
- Interactive Investor Trading Account
- IG Share Dealing Account
- Hargreaves Lansdown Fund & Share Account
Any of the platforms will allow you to manage your portfolio online or through an app.
If you want to know the best platform to choose, explore each of them and get information concerning their various share plans on their websites by clicking on their links.
The second option won’t be available until 2020. You have to wait for that option until the currency is launched into the market.
Meanwhile, it must be noted that the intention of the giant social media network to create a global fiat-backed block-chain currency includes launching “Libra currency” and “Libra investment token”, which will enable users and investors to benefit from the project handsomely.
Libra currency will be made available to the public for users to buy, sell or transfer funds on Facebook and Whatsapp, while the other will serve as a security, according to Facebook.
Investors can buy Libra investment tokens directly and become members of Libra Association, the project’s governing consortium or invest in accredited company investors.
In other words, Libra Investment Tokens are like your shares in a financial bank. You make profit based on the value your shares derive from expected future cashflows.
So, in the case of Libra, investors will earn based on the interests realized on the reserves. Meanwhile, an individual can purchase equity in any organization that has Libra Investment Tokens.
Facebook expects the toll of company members of the association to reach 100 or more before 2020. The point is Libra has the potential to be traded alongside bitcoin on crypto exchanges.
So, if you consider Facebook’s reach, millions more investors will be welcomed into the bitcoin economy.
However, investors can rely on buying in companies that have investment tokens as that is better than buying Libra directly.
- Choose a share dealing platform: Sometimes they are called brokers, or share trading platforms. If you’re a beginner, visit Finder to find the information you need to make the right choice.
- Open your account: You need your personal data to open an account with your broker. So, make sure you have your passport or ID information intact. This includes your official name, email address, date of birth, contact address, national insurance number and employment status and so on.
- Confirm your payment details: To confirm your payment details, you have to fund your just created account with a bank transfer. You can equally use your debit or credit card to achieve the same purpose. Use any method that is most convenient for you.
- Find the shares you want to buy: Remember in the first step, you are asked to select your share dealing platform. So, while doing that, consider which share plan is most suitable for you, then buy. But you have to make sure you have enough fund that can take care of your share plan.
Based on different factors ranging from economic circumstances to government monetary policies, Facebook share prices are not fixed. This is not peculiar to Facebook alone but every currency market against exchange rates.
All you have to do is to ensure you’re very much careful in considering current situations that surround the company of your interest before investing your money.
In this guide, we will be looking at the following factors as they affect investing in Facebook’s share.
- Financial Situation: Information provided in Facebook’s financial report should be used as a guide to get a clear-cut understanding of what the company is going through financially. As the situation has a great impact on its share price, you need the financial report to take a decision. If the circumstance is bad, that should tell you not to invest in the company. But if based on the report, you can sense boom, the profit will be very handsome. Facebook issues its annual report on the 30th of September of every year. So, go through its previous years’ financial reports and forecast what the future will bring.
- Internal Economy: Assuming the company is planning to release a new product, or to do anything that can make a negative impact on the company’s growth, that might not be a good time to invest. Reason is that the situation will affect the company’s share price, which can cause you to run at loss. Consider first if the company is making profit due to the events. Listening to news will give you the insights into what is happening. As a matter of fact, events like these can be found in the company’s news. So, make sure you’re updated.
- External Economy. Make sure you consider likely external factors such as how the company is performing among its competitors. Government policies also have a great impact on the growth of every privately owned company. Assuming the company is losing to its competitors or dealing with several government’s sanctions, the company will definitely have a stunted growth which in turn will affect its share price. All you have to do is to consider if the growth of the company is sustainable or not? This matters to know whether your investment in the company is going to be a short-term or long term. At present, Facebook is facing a law suit of about $5 billion. Technically, this will affect the company’s share price. So, shareholders should be aware of this by following news related to the industry as a whole not just news about the company.
- Dividends: Another thing to consider before buying shares in a company is to know if the company is actually paying dividends to its shareholders. Currently, Facebook doesn’t withhold its shareholders’ profits. So, no cause for alarm.
- Shareholder Meetings: You should also consider if the company creates an avenue to meet with its shareholders. This should occur on a yearly basis to enable the shareholders appraise issues affecting the company. As a prospective shareholder, take your time to know when such meetings occur to show your sense of belonging. Facebook holds its annual shareholder meeting in Februaries. So, listen to news to get the date.
Proof Facebook Libra Currency is Genuine
According to CNBC’s Jim Cramer, Facebook should be lauded for this fantastic project to enable people in need of the technology most especially those who are in troubled communities to have greater access to the digital age of money.
In his statement, he said:
“Now this is a genuinely positive thing. I have no problem with companies doing good things to improve their public image. And ultimately, I wouldn’t be surprised if Libra turns out to be a very big deal for Facebook shareholders, giving you still one more reason to buy the stock if you needed any more to do so.”
According to the “Mad Money” host, it is hopeful that the technology will help Facebook redeem its image.
He said the company has “done a lot to ruin its reputation.” This is due to the series of privacy related cases the company has been dealing with.
Carter, however, said he has a very strong confidence in the Libra project because of the involvement of David Marcus who was a former president of PayPal. He said Marcus “is a champion for privacy and yes, a rectitude when it comes to the customer”.
He noted that Facebook Libra currency is truly a great initiative. But because the project will badly hit both financial banks and credit card proprietors, it might not see the light of the day if it doesn’t get necessary support from government.
So, if after all scrutiny, Facebook Libra currency is found to be safe for public consumption, Facebook will succeed.
Since many companies are in partnership with Facebook on this project and there is an avenue for individuals to buy shares either directly in Facebook or in any of the accredited token handlers, Facebook Libra currency will serve as a medium to bring more financial solutions to small businesses in the very nearest future.
So, every prospective investors should know how to make money from the technology.
As more investigations are on going by the US law makers to look into the project inside out, which I’m sure they will be convinced as Cramer and others who believe in the good work did, Facebook has many questions to answer before 2020.
Hence the future is still unclear.
What is clear is no consumers will trust the giant social media company with their financial data without having votes of confidence by the concerned international financial regulatory bodies.