Trump Slams Bitcoin in Tweet Storm: What Does It Mean? Anything?

-edited

In a series of three Tweets, Trump went after Bitcoin. Does it matter?

Trump went after Bitcoin today.

I am not surprised, except by the timing.

Bitcoin Doesn't Care

I discussed Bitcoin on live national radio Tuesday night on Coast-to-Coast with George Noory.

I am a frequent Coast-to-Coast guest, typically for a few minute economic update about 4-5 times a month, going all the way back to 2007.

On Tuesday, George and I discussed the economy and upcoming recession for two full hours.

A caller asked about Bitcoin.

I replied that it was a free-market construct, but if governments or central banks ever felt that it was a threat, they could squash it.

The caller said it couldn't be done.

I disagreed. I stated that if governments ever felt threatened they would make up excuses to shut it down.

Fictional Reasons

I specifically mentioned money laundering, tax avoidance, and drug trafficking.

I added that the charges would mostly be fictional, but it would not matter.

Trump Surprise

I am surprised Trump mentioned this today.

It's just happenstance that a warning I made two days ago and it came into play today.

Bitcoin Doesn't Care

I do not think governments or central banks will shut down cryptos just yet. But the threat is real.

Wait a second, Bitcoin doesn't care.

Indeed it doesn't. Nor does the ocean or moon rocks.

Hash rates can go to the moon, or not. But if Governments will not allow conversion of Bitcoin into fiat and refuse to allow stores to accept Bitcoin, it would become worthless overnight.

Bitcoin will not care one bit.

Nor will Bitcoin care when governments ban cash and force everyone to use their own digital currencies. But those sitting in millions of dollars of profits will care when their profits suddenly vanish into thin air.

Best Case for Bitcoin

The best thing for Bitcoin, actually, would be if it did not display these tendencies to blast-and-crash because that provides governments another excuse to shut it down.

The battle cry will be: "We need to protect the consumer".

That's another reason I mentioned the other night.

When?

I have no idea. Nor does anyone else. I rather doubt the threat is imminent.

Yet, it could be, and it would not surprise me in the least.

Feelin' Lucky, Crypto Holders?

Why not?

After all: Bitcoin doesn't care.

Mike "Mish" Shedlock

Comments (33)
No. 1-16
thimk
thimk

I find it somewhat ironical , trump is touting the dollar as "stronger than ever" and the most dependable, yet his efforts are to devalue . bitcoin values/usage are a product of fed intervention, a search for a return on investment/principle and has supplanted gold to some extent as a "safe haven" . give the consumer 5% on savings and this s**t will stop.

Harbour
Harbour

This will drive liberals to Bitcoin - expect a price hike. Trump then outlaws it and liberals go broke....?

Tengen
Tengen

I doubt Trump has much of an opinion on cryptocurrencies in general, in which case he defers to his advisors. They probably told him it's bad because drug lords and rogue governments love it or something along those lines, rather than telling him that crypto could undermine their statist fantasies.

Trump has a few issues he genuinely cares about and I'm glad he got squeamish about a war with Iran, but he's generally easy to manipulate and people have had a few years to practice with him.

Sandu7
Sandu7

Regarding the timing: 30y T-Bonds had a very poor auction today. Inflation higher then expected. I would not be surprised if both the Fed and Trump will fight in tandem at some point to prop up the dollar. This might be a first collaboration (coordinated) between the 2 parties to send signals to the markets that some of the competing options to the dollar are not being viewed well. Powell was not either much in favor of the libra in his testimony.

Waiting for the day when Trump will say something about gold too. That will be a signed that they are really scared about the dollar’s fate.

Sechel
Sechel

i wait for the day we have a normal president who doesn't use twitter as a brain dump mechanism

JonSellers
JonSellers

I'm guessing someone told him that Obama is a fan of cryptos.

FromBrussels
FromBrussels

There were times when people paid with beads and shells and other intrinsically worthless items, next came currencies backed by valuable stuff( food stock, precious metals, diamonds etc), then out of pure desperation and to stop healthy economic cycles in order to guarantee uniterrupted eternal economic growth, the increasingly 'clever' sapiens ape, its central banks representatives in particular, developed unlimited fiat currencies increasingly and exponentially backed by.... free DEBT and a almost religious belief in a uncertain, cheap debt driven economic future......NOW the latest hype are cryptos backed by .......well, rrrrmm, well ...yep , you nailed it....I think...

Guinny_Ire
Guinny_Ire

I've stated this since the beginning of bitcoin. "It's illegal to own, you have 30 days to divest of your holdings" is all it takes. Any country could do it at any time and once one does others will follow. Now it may still continue to trade as a black market currency but then there will be problem of a hidden centralized or series of exchanges. Most likely a or several govts will eventually take the exchanges and then run them themselves for "back alley" transactions ie CIA, etc. It started as a fringe currency and will end as one. Also any appreciation as measured by fiat money (ie gold) will be taxed as the devaluation of currency cannot be threatened by an asset that avoids just that.

Curious-Cat
Curious-Cat

Governments monopolize or try to monopolize control over all important human activities. Among them are violence (think police and armed services), marriage (even religious services require a marriage license), communication (think licensing of airways and control over internet), transportation (think drivers licenses and control over GPS), psychoactive substances (drug laws), and money (think the "legal tender" law). There is no reason if our government or others begin to feel threatened by crypto currency they won't find a way to destroy it or drive it underground.

abend237-04
abend237-04

I think cryptocurrencies are a two-edged sword. They're probably acting as algo-driven hot cash incinerators presently (and helping to hold down inflation?), but criminal cartels, driven increasingly to use them will eventually, and utterly, corrupt every government that allows them Think Al Capone, 1920s prohibition and corrupt Chicago cops and judges, St. Valentine's Day Massacre, etc., etc. I think the Chinese are ahead of us in banning them.

Maximus_Minimus
Maximus_Minimus

At face value, Trump has quite a sane view of cryptos, only if he could extend the same line of thinking to central banking fiat. I am still hoping that one day he wakes up, and tweets that he is going to put an end to this insanity, and end the FED.

Stuki
Stuki

"But if Governments will not allow conversion of Bitcoin into fiat and refuse to allow stores to accept Bitcoin, it would become worthless overnight."

There are still pockets where governments aren't quite totalitarian enough ( nor are populations pliant, subservient and bent over enough), to ban much of anything. And, as is inevitavle, those are the places with expending populations and an expansionist drive.

Many of those places don't currently have an infrastructure making digital crypto currencies convenient. But that infrastructure gets cheaper and more available every day. And once the infrastructure is in place, "banning" cryptos resolve to "banning" cryptography. Not really all that easy a thing to do.

You don't need convertibility in San Francisco. If you have convertibility in Mogadishu, you can buy your gold and guns there. As can the guys you need to anonymously bribe to get it safely back to San Francisco.

Of course Trump's handlers tell him to scare his pliant, uncritical drones away from cryptos. They're a mouse trap infinitely superior to anything any totalitarian thugband of undifferentiated mediocrities cold ever hope to offer. And slowly, then all at once, people will figure this out:

Webej
Webej

I think the takeaway is that "stable genius" has been talking with advisors about strong/weak dollars and the role currencies and money plays in life.

Dutchyyy
Dutchyyy

Why is facebook not buying a country with a currency?

Casual_Observer
Casual_Observer

Trump is right about these unregulated currency markets. Bitcoin can't have it both ways. There were many similar online trading/currency markets shutdown because of human trafficking, terrorism and other ties. These charges weren't fictional. Kim DotCom was the creator and actually involved. I actually like cryptocurrencies as a concept but I think central banks will co-opt the good parts of it and then shut down all the unregulated markets which now trade cryptocurrencies in the dark side of the internet. That dark side is involved in the same things previous online trading markets were shutdown for. Would it surprise you to learn that Epstein trafficked humans via his hedge fund ?

Bastiat
Bastiat

Mish, the US government cannot ban bitcoin anymore than Zimbabwe can ban its citizens from using US dollars. As long as bitcoin is convertible in some other currency and on the black market it will still have value.