It’s been a very interesting 24 hours in the crypto world.
First, we had Fed Chair Jerome Powell testifying about crypto before Congress. He called for a halt to Facebook’s Libra stablecoin project and had some very interesting things to say about bitcoin.
When asked whether crypto is a threat to the dollar’s status as world reserve currency, Powell said the following (emphasis mine):
| Things like that are possible, but we really haven’t seen them. We haven’t seen widespread adoption. Bitcoin is a good example. Really almost no one uses bitcoin for payments. They use it more as an alternative to gold. It’s a speculative store of value like gold…
We haven’t seen it, but that’s not to say we won’t see it. And if we do see it, yes, you could see a return to an era in the United States where we had many different currencies. |
Indeed, I believe we’re heading toward an era where we’ll have multiple currencies in the U.S.
Later in the day, President Trump joined in on the action via Twitter. Here’s the full text of his crypto tweets (emphasis mine):
| 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! |
Very interesting… He sounds quite defensive to me.
The big takeaway here is that all of a sudden, everyone’s considering questions about crypto and fiat that we’ve been asking for years.
Slowly, the world is starting to realize what crypto is all about. It’s always been about building an alternative to the fatally flawed fiat money system. Now the establishment has been forced to acknowledge it. And it’s pushing back.
This is a good thing for crypto owners. Two of the most powerful political forces in the world, the president and the Fed chairman, have been forced to discuss crypto as a threat to fiat. We want these discussions to take place. They will be difficult, and powerful politicians like Trump will take further shots at the industry. That is to be expected.
But the important thing is that millions of people all over the world are now pondering questions they never have before, like…
- Why is Trump attacking bitcoin?
- Why is Powell calling for a shutdown of Libra?
- Why does the Fed have a monopoly on money?
- Shouldn’t citizens be able to choose their own currencies?
Ultimately, I believe these questions will lead to more crypto owners entering the market as more people start to realize the scope of the issues being dealt with here.
I continue to believe we are headed much higher from here.
Have a great weekend, everyone.
Adam