Who is the real Commander-in-Chief? In the cryptocurrency market, it’s not Donald J. Trump.
POTUS finally tweeted about Bitcoin, and it had absolutely no effect. Considering the daily Twitter-tirade that Donald Trump spews, which covers everything from an all-out war with Iran to Robert Pattinson, a tweet about the $320 billion market was expected to have an effect on Bitcoin’s trade and currency charts. However, they fell short.
Amidst a tense hearing between the US House of Representatives’ Financial Services Committee and Jerome Powell, Chair of the Federal Reserve on Facebook’s Libra, Trump decided to weasel his way into the issue, using the only way he knows how: Twitter.
Prior to the commencement of the second day of discussions, Trump threw his hat into the ring and confirmed his lack of appreciation for Bitcoin. Stating that he isn’t a “fan of Bitcoin or other Cryptocurrencies” which, in his opinion, are “not money,” the leader of the free world made an enemy of the decentralized currency world.
Unlawful behavior, which Trump is a practical expert in, is ‘facilitated’ by cryptocurrencies, he said, citing “drug trade” as an example. He tweeted,
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….
— Donald J. Trump (@realDonaldTrump) July 12, 2019
Libra, in the President’s opinion, will have “little standing or dependability,” and if Facebook wants to “become a bank,” they will have to “seek a new Banking Charter.” In closing, Trump reaffirmed the importance, dominance, and reliability of what he calls the only “real currency in the USA,” the US dollar.
Needless to say, the cryptocurrency community is absolutely abuzz with Trump’s mention of Bitcoin, regardless of the misconstrued nature of this tweet. To be honest, no one expected Trump to call Changpeng Zhao and Anthony Pompliano over to the White House and set up a Binance account overnight. However, his Twitter-BTC tirade is telling in terms of its effect on the market.
You would think that a critique by the most powerful person in the world would thump the price of Bitcoin. However, it was anything but. A dip was seen on the BTC hourly chart. However, in the largest context, the price didn’t fall off the bandwagon as one would expect.
Given how volatile the market is recently, and the ease with which a piece of information can swing Bitcoin’s price, Trump’s tweet did not awaken the bears. Barring a fall from $11,700 to $11,200, the price stabilized quickly. The price has since gone past $11,500, perhaps knowing the nature of Trump’s short term Twitter memory.
All-in-all, the leader of the free world calling Bitcoin “not money” and equating it to drug trafficking, shaved just under 4.3 percent in two hours, which was recovered soon after.
Jerome Powell, Chair of the United States’ Federal Reserve, had more of an effect on Bitcoin’s price, despite not even mentioning the top cryptocurrency by name. During the aforementioned hearing before Chairwoman Maxine Waters and the Financial Affairs Committee on July 10, Powell primarily discussed Libra.
He stated that Facebook’s cryptocurrency raises “serious concerns,” and that it ‘cannot go forward’ until several questions regarding privacy and security are met. Powell however, urged lawmakers to not “sprint” towards regulating the project. Instead, he asked them to adopt a “patient and careful” approach.
The Fed chair stated,
“Libra raises serious concerns regarding privacy, money laundering, consumer protection, and financial stability. These are concerns that should be thoroughly and publicly addressed before proceeding.”
Libra’s unintended blessing on the Bitcoin market is profound, to say the least. Facebook, with its billion-strong user base, heavyweight consortium, and the messaging power of FB Messenger and WhatsApp, can bring a largely untouched market into the digital assets industry, which can provide a bridge to decentralized currency.
The same transpired as Powell’s words were echoed in the halls of the Financial Services Committee. After breaking the $13,000 mark Bitcoin bled, dropping to $11,350 within hours of the Powell-Libra roadblock. The over 13.4 percent decline in less than 15 hours reiterated the power that the Central Bank chief has.
Several naysayers from the traditional world of finance have called out Bitcoin and the cryptocurrency market before, with ill-gotten spoils on the price charts. Warren Buffett, Charlie Munger, Bill Gates, and Jamie Dimon have all launched bitter tirades against Bitcoin, with Trump now joining the list.
The trio of Buffett-Munger-Gates trashed Bitcoin in May 2018, calling it fools gold, and a “scumball activity.” Following the comments, Bitcoin’s price took a tumble, furthered by the ongoing crypto-winter. Earlier in 2019, Buffet called Bitcoin “charlatan’s” gold, and referred to it as a ‘gambling device.’ This again impacted the price, but given how the market was going in February, the effect was short-lived.
Trump on the other hand, had no discernible effect on the price of Bitcoin. This despite being in a direct position of authority, one more powerful than Berkshire Hathaway and Microsoft. POTUS’s tweets have caused relations between countries to turn sour and currencies to fall. Even the S&P 500 fears it, but Bitcoin stands resolute.
The head of the most powerful Central Bank in the world talking to crypto-critical legislators about possibly banning a cryptocurrency that could do wonders for Bitcoin affected the market more than the Commander-in-Chief’s tweetstorm.
What does this tell you about the cryptocurrency market?
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