The tweet of the day, and possibly the week, has inevitably sparked controversy in the crypto world.
The US President’s crypto voters are even considering leaving the ship, his critical voices are confirming their stance and the neutrals are trying to understand if he has any point with his rant or it’s just “thin air.”
Leaving aside any sympathy or hostility for the man and the politician, we should at least try to read his tweet with some objectivity and possibly look at deconstructing the content with a valid purpose.
Taking a step back, we look at the economic background of Bitcoin and the crypto space. The Libertarian movement takes its roots from the Austrian School of Economics which in essence views any government as having little presence in the individual’s life and finances except essential duties like protection of property rights and judgment on dispute matters. Other than that they emphasize freedom of choice, voluntary association, and individual judgment. It’s useful to read Saifedean Ammous’s “The Bitcoin Standard” to put Bitcoin and its economics in perspective.
In this scenario, any government of any political color will have difficulty in accepting a decentralized society based on a cryptocurrency economy and an open and censorship resistance administrative machine.
There should not be any surprise that the President of the USA, Donald Trump is advocating the power of the US dollar and pointing out that Bitcoin and cryptocurrencies are not money. But who decides what is money? Wikipedia definition of Money states that it is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context.
Over the centuries, the meaning of money has changed from barter to primitive money like tobacco, shells, and cattle in the 17th century up to the diffusion of metal objects now represented by coins.
Then we had a gold backed money until the supremacy of the dollar took place. Money has developed from being a simple means of exchange to a fungible means of exchange, divisible, portable, highly durable, and resistance to counterfeiting.
Bitcoin is all of this plus a store of value and a unit of account. It’s not thin air, it’s thick and sound air. But it’s decentralized, nobody can control it, it’s resistant to censorship and inflation because scarce.
So why the surprise at Donald Trump’s tweet?
Or at any world leader’s stance? The interest that a few of them have revealed around cryptocurrencies is mainly for their digital aspect and the resulting speed and cheap transactions, surely not because of their essence which is a threat to the system.
The fact that the asset is volatile and will probably be for still some time just shows the usual pattern that any new asset offers. Most assets on their first years of life are volatile until mass adoption happens and the value stabilizes. If Bitcoin reaches expected highs of $100,000 or a million, at that point it will become more difficult to move in price.
“Assets can facilitate unlawful behavior, including drug trade and other illegal activity….”
This way of spreading FUD is not even that efficient anymore. It’s of a couple of days ago the news that one of the largest drug busts in U.S. history had nothing to do with Bitcoin but was related to the narco-dollar instead.
Those who expect crypto regulation, still do not understand that cryptos like Bitcoin cannot be regulated for their own nature.
Probably Facebook Libra also mentioned in Trump’s tweets, will be highly regulated because it’s not a decentralized and censorship-resistant asset but even Libra represents a massive threat to institutional money: “We have only one real currency in the USA, and it is stronger than ever, both dependable and reliable. It is by far the most dominant currency anywhere in the World, and it will always stay that way. It is called the United States Dollar!” As Donald Trump points out.
Bitcoin, on the other hand, cannot be banned since a simple internet connection or even a satellite is all that’s needed to use it.
Surely what the authorities can do is spread Fear, Uncertainty and Doubt just like Trump has just done with his tweet.
Apparently, though, this has not been enough to tank the market which is actually reversing the trend and slowly and slightly recovering from the last couple of days of losses.
If not even Donald Trump can stop Bitcoin and the crypto revolution, I don’t know what will.