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?
Brian Armstrong of Coinbase sure thinks so:
“First they ignore you, then they fight you, then you win,” said the US exchange’s chief executive. “We just made it to step 3 y’all,” he concluded.
Armstrong recalled: “Achievement unlocked. I dreamt about a sitting U.S. president needing to respond to growing cryptocurrency usage years ago.”
Trump’s 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.
Facebook Libra – get a banking charter 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 crypto.
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 Libra?
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