Donald Trump took aim at bitcoin last week. He also kicked off a whole new phase in bitcoin’s mainstream moment.
Is there a Trump rally incoming for bitcoin?
That’s what’s on the minds of many after US president Donald Trump tweeted on Thursday that he was “not a fan of bitcoin and other cryptocurrencies”.
Although Trump is loved by many he is arguably hated in at least equal measure at home and possibly hundreds of millions more around the globe.
So could the Trump take down of bitcoin push those inclined
to look favourably on anything that Trump doesn’t like, bring a net boost to
the price of bitcoin?
His strident comments may have surprised some but that probably depends on your politics, or at any rate what you think Trump’s politics are.
Trump is fairly certain that cryptocurrencies “are not money”,
noting that they are “highly volatile and based on thin air”.
That’s wrong in so many ways but we needn’t bother to provide more well-worn rebuttals for EWN readers.
however, it is worthy or recalling that his tweets come hard on the heels of Fed chairman Jerome Powell accepting that bitcoin has a use case as a store of value similar to gold.
Unlike Trump, Powell also has the foresight and historical perspective to appreciate that nothing lasts forever when he was considering the current role of the US dollar as the world’s reserve currency of choice.
It is against this background perhaps – and the question of how to deal with Facebook’s Libra – that Trump’s attitude should be measured.
Where the Fed chairman goes, Trump is often tempted to go in
the opposite direction.
Libra – get a bank licence says Trump
And Donald and Mark (Zuckerberg) aren’t exactly buddies either. Trump made that clear in his demand that Facebook go get a banking licence before it launches Libra.
“If Facebook and other companies want to become a bank, they
must seek a new Banking Charter and become subject to all Banking Regulations,
just like other Banks, both National and International,” said the US president.
Powell, in coordination with other central bankers, is determined that Libra does not see the light of day until regulations that adequately address the perceived risks it conjures up are firmly in place.
Trump – a nationalist who doesn’t like “global money” unless it’s the US dollar
Perhaps it is not surprising that Trump’s economic nationalism has outweighed the hopes of those libertarians who lean right.
Although Trump’s thoughts to date on the US dollar have been contradictory as to whether he wants a strong or weak dollar, he does want the US’s preeminent position in the global financial system to be maintained.
With that objective in mind, the dollar has to be protected from all comers, and that includes bitcoin, Libra and any other potential challengers it would seem.
Although Obama made references of a negative kind about crypto with his “Swiss bank account in your pocket” remark, which was interpreted as a reference to bitcoin, this is the first time a US president has explicitly discussed bitcoin. That matters.
Crypto market takes Trump in its stride – will his remarks support bitcoin price?
The market did not immediately react in an adverse fashion to Trump’s observations, and the price of bitcoin has actually appreciated since then.
In other times, such a high-powered individual throwing sand
in the face of crypto would have triggered a price plunge. Indeed, Powell’s
recent remarks were cited by some as the reason for the recent pullback from
$13,000 by bitcoin.
In fact, far from being a negative for bitcoin, Trump’s tweets may help to support the price.
Bitcoin was priced at around $11,500 when Trump made his tweet on Thursday night and is $200 higher at the time of writing, trading at $11,725 on Coinbase.
That’s not a significant move by bitcoin standards, but it does show resilience in the face of political pressures.
Trump tweet a great advert for bitcoin
More than that though, Trump’s tweet has led to headlines
around the world as the mainstream media picks up on the latest pronouncements
from the Oval office.
If nothing else it further raises the profile of bitcoin and
But more than that, it will get people asking “what are they worried about?”.
If the dollar is so “dependable” and “reliable”, as Trump would
have it, what’s there to worry about? If crypto is so useless, why worry about
Unwittingly, Trump has just provided bitcoin with the sort of advert money (crypto or fiat) can’t buy.
If The Donald wants to get up to speed with the real deal on crypto, Tron’s Justin Sun has reached out with an invite to join him for lunch with Warren Buffett:
And if the president doesn’t have time for that, perhaps he should dwell on the fact that since his presidency began the dollar index is down -4% and bitcoin has returned 1,186%.
Image: Courtesy Fickr, Gage Skidmore
The post Trump Bitcoin Takedown To Provide Unintended Price Support For Crypto appeared first on Ethereum World News.
Powell compared bitcoin to gold, referring to them both as speculative stores of value.
Fed Chairman Jerome Powell said Facebook should not be allowed to launch its Libra cryptocurrency until the company details how it will handle a number of regulatory concerns.
Fed chair Jerome Powell was asked about Facebook’s Libra cryptocurrency during a press conference Wednesday.
Jerome Powell, chairman of the U.S. Federal Reserve, had some harsh words for cryptocurrencies during an appearance before the U.S. Congress.
Speaking to the House Financial Services Committee, the head of U.S. central bank said Wednesday that cryptocurrencies have no “intrinsic value” and presented severe risks to investors, as CNBC reported. Part of his concerns seemingly stem from the apparent crypto bubble – he said that “relatively unsophisticated investors see the asset go up in price, and they think ‘this is great, I’ll buy this.’ In fact, there is no promise of that.”
“It’s not really a currency. We’re not looking at this as something that we should be doing … Mainly I have concerns. If you think about what currencies do, they’re supposed to be a means of payment and a store of value basically and cryptocurrencies are not used very much in payment … and in terms of the store of value, if you look at the volatility it’s just not there.”
“They are very challenging because cryptocurrencies are great if you’re trying to hide or launder money, we have to be very conscious of that,” he said.
That being said, though “there are investor and consumer protection issues,” Powell said the cryptocurrency market isn’t big enough to threaten financial stability, and therefore the Fed isn’t seeking to regulate it, according to Bloomberg.
Powell’s testimony comes hours before the Financial Services Committee is set to host another hearing directly focused on cryptocurrencies. As previously reported by CoinDesk, the committee hearing will hone in on the question of whether cryptocurrencies are a new form of money.
A memo published after the hearing was announced notably states that members will examine “the extent to which the U.S. government should consider cryptocurrencies as money and the potential domestic and global uses for cryptocurrencies.”
Powell image via Wikimedia Commons
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