Lots of politicians have taken shots at Bitcoin and other cryptocurrencies. It likely comes as no surprise to people familiar with the mindset of status quo politics and the innovative creep that Bitcoin introduces. In many minds, Bitcoin is becoming an ever more formidable competitor to the US dollar and the EU’s euro, among other currencies. This is scary to some, but a refreshingly welcome addition to others.What was surprising was that US President Donald Trump had stayed away from the debate – until recently. Here is his Twitter tirade a few days ago.
“I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity …
Similarly, Facebook Libra’s “virtual currency” will have little standing or dependability. 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. 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!”
~President Donald J. Trump, US President, via Twitter on July 11, 2019
Bitcoin Since Trump’s Comments
Trump’s Twitter attack on the world’s most well-known cryptocurrency came on Thursday, July 11th at just past 5 pm ET. The price of Bitcoin ended that day at $12,669, up slightly from the prior day’s $12,568.
Since his comments, Bitcoin has been under some pressure. Bitcoin’s price dropped to $11,561 on Friday, July 12th and then increased slightly to $11,578 on Saturday, July 13th. Sunday, the 14th, saw the cryptocurrency drop to $11,412 and Monday July 15th saw Bitcoin decline to $10,853. That puts Bitcoin down a little less than $2,000 since Trump’s comments.
The drop in price was definitely not pretty, but not too surprising. In fact, in some circles, many are surprised that critical comments by the American president has not caused the cryptocurrency to drop by more than what it has. For the year to date (through July 15th), Bitcoin is up an astonishingly 183 percent. That beat most any other financial asset’s return for the year so far.
Thinking Through Trump’s Comments
One has to wonder why the sitting president of the United States would make such comments. Some speculate that his ego – his feeling that he is missing out on massive money making – that made him make the comments. Others assume that he simply is driving up support for a political campaign that focuses on security and mentioning risks with Bitcoin may drum up such support (forget the fact that the US dollar is used for much more illicit transactions that Bitcoin). Perhaps the most common sense answer is that the many bankers advising him have pushed him towards this point of view.
In any event, Trump’s comments appear to have had a short-term impact on the price of Bitcoin, but no as large as many would have expected. Bitcoin appears to have a growing contingency that is quite comfortable with Bitcoin’s power at challenging the status quo money powers.
