President Trump Tweets About Bitcoin
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Bitcoin had quite the day yesterday.
It all started with the Chairman of the Federal Reserve, Jerome Powell, being asked about the decentralized digital currency in front of the Senate Banking Committee.
When asked whether Bitcoin could become globally adopted and ultimately render other reserve assets worthless, Mr. Powell said “I think things like that are possible but we really haven’t seen widespread adoption. Bitcoin is a good example, almost no one uses it for payments, they use it more as an alternative to gold, it’s a store of value, it’s a speculative store of value like gold.”
It is pretty incredible to watch this video clip. Gold is a $7+ trillion asset with 5,000+ years of history and Bitcoin is a $200 billion asset with 10 years of history. But when it comes to their abilities to serve as stores of value, the overseer of the global reserve currency believes they are alternatives to each other.
As if this wasn’t bullish enough for Bitcoin’s future prospects, President Trump then decided to weigh in on Bitcoin and cryptocurrencies.
He presented a rather mild argument against Bitcoin, including many archaic and unreasonable critiques. To put this in perspective, you could replace the word “Bitcoin” in Trump’s tweets with US dollar and it would read something like this:
“I am not a fan of US dollars, which are based on thin air. These dollars can facilitate unlawful behavior, including drug trade and other illegal activity.”
The new tweet may actually be more accurate than President Trump’s original tweet in the eyes of some people. But Trump didn’t stop with just one tweet. He continued on to talk about Facebook’s Libra cryptocurrency and the US dollar.
There are plenty of truths in these statements, including the dollar being the dominant currency in the world and the reliability of it. But to say that it is stronger than ever would be misleading, especially since it has lost more than 96% of it’s purchasing power since 1913.
And to make the claim that the US dollar will be the global reserve currency forever would mean that you are completely ignoring thousands of years of history. As we have talked about before, every currency except for the 180 circulating currencies today have previously failed. And the average life expectancy of a fiat currency is around 27 years, but it has been 227 years since the United States Congress created the United States dollar as the country's standard unit of money — eventually there is a return to the average.
Regardless of what you think of Bitcoin or the US dollar though, it is important to remember that the dollar doesn’t need to fail in order for Bitcoin to succeed. In fact, it is likely that both will coexist for a long period of time. Thankfully, the comments made by Jerome Powell and Donald Trump yesterday were mildly negative to neutral.
Even better, the Bitcoin and cryptocurrency markets were unaffected by the comments. The top 10 assets by market cap were actually all up over the last 24 hours.
Some of the most powerful people in the world are slowly starting to attack Bitcoin and other digital assets. They are quickly realizing that this is not a US-based industry, but instead it is a global phenomenon that is immune to the traditional attempts of currency manipulation that politicians and central bankers historically use.
In effect, Bitcoin is working. It keeps producing blocks of transactions without any issues. And it continues to prove why it is the most anti-fragile asset in the world.
-Pomp
The Blockstack community is pioneering the next era of internet infrastructure for blockchain-based apps that #CantBeEvil, where the rights you enjoy in the physical world extend to the digital world. Blockstack recently made history by being qualified by the SEC for a $28 Million Dollar Cash Token Offering. Read the full article here.
THE RUNDOWN:
Fed’s Powell Is as Unsure How the Government Will Handle Libra: Federal Reserve Chairman Jerome Powell’s shrug could be heard all the way to Silicon Valley. Like everybody else in government, the U.S. central bank chief is unsure how regulators will handle Facebook Inc.’s plan for a digital currency called Libra. He made that clear at a Senate hearing Thursday where he reiterated concerns about the cryptocurrency’s potential for fomenting money laundering and financial instability problems. And he expressed specific worries over customers’ privacy. Read more.
Crypto Sends Sell Signal as Congress’ Facebook Fixation Grows: While U.S. lawmakers zero in on Facebook Inc.’s ambitious plan to upend the global financial system via its cryptocurrency project, technical indicators are flashing major warning signals when it comes to the price of digital assets. Based on the GTI VERA convergence-divergence indicator, the Bloomberg Galaxy Crypto Index -- which tracks some of the largest digital assets and is comprised 30% of Bitcoin -- received its first sell signal since early June. The indicator detects positive and negative trends, and the last time it flashed a warning sign on June 4, the index fell about 10% in one trading session. Read more.
BOE's Mark Carney Says Facebook Token Must Be ‘Rock Solid’ From Start: Facebook Inc.’s Libra cryptocurrency will have to be bulletproof from day one, says Bank of England Governor Mark Carney. “If it’s successful it becomes systemic because it would involve a very large number of users and if you’re a systemic payments system it’s ‘five-sigma,’’’ said Carney, referring to a threshold scientists are often held to in proving test results. “You have to be on all the time, you can’t have teething issues, you can’t have people losing money out of their wallets. The standards are in a different zip code, to use the American term, to the standards in other technologies.’’ Read more.
Crypto Coffee Coin Is Coming to Brazil's Countryside Farmers: Coffee farmers in Brazil’s countryside could be soon be using cryptocurrency for their day-to-day needs. A major arabica-bean cooperative, Minasul, is planning to this month launch a blockchain-based digital coin that will be backed by coffee supplies. Farmer members will be able to use the “coffeecoin” to buy fertilizer, machinery and other non-farm products, including cars and food, Jose Marcos Magalhaes, Minasul’s president, said in an interview during the Global Coffee Forum in Campinas, Sao Paulo state. Read more.
SEC Gives YouNow’s Ethereum Token ‘Props’ Reg A+ Approval: The U.S. Securities and Exchange Commission has granted an ethereum-based token a Reg A+ qualification, the startup YouNow said Thursday. Props is an ethereum-based blockchain token that integrates with streaming platforms like YouNow and XSplit to reward users and creators with tokens. YouNow – which developed the Props blockchain – announced today that it will begin rewarding content creators with Props for in-app activities that “drive community engagement.” Users will also begin to receive tokens for engaging with the platform. YouNow will begin by distributing a total of 187 million tokens to users and creators, according to an SEC filing. Read more.
LISTEN TO THIS EPISODE OF THE OFF THE CHAIN PODCAST HERE
Patrick O'Meara is the Chairman and CEO of Inveniam Capital Partners. He has a long, storied career in traditional finance and is not focused on building automation into the financial industry. This one will really make you think about where we are potentially going with the technologies being built today.
In this conversation, Patrick and I discuss:
The issues with traditional financial asset structures
What it means to model financial assets for data and not code
How tokenized assets are currently being selected
What an automated future of finance could look like
I really enjoyed this conversation with Patrick. Hopefully you enjoy it too.
LISTEN TO THIS EPISODE OF THE OFF THE CHAIN PODCAST HERE
Here are my tweets from yesterday:
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