Well, the big news last week (in our corner of the world at least) was Donald Trump’s tweets about bitcoin.
As one redditor put it:
And crypto prices bounced off of a two-day bloodbath:
So I guess we have Trump to thank for the pump.
Over the longer term though, there’s no telling what the president’s interest in crypto could do for prices.
It is certainly bringing a lot of attention, and a lot of classic “this is good for bitcoin” memes and comments. But it’s really Facebook and Libra that have brought crypto back into the mainstream, and it will be interesting to see what Facebook’s response is.
Although, as I’ve written before, no matter what happens with Facebook’s Libra cryptocurrency, it really could be “good for bitcoin”.
Well, first let’s look at why POTUS (president of the United States) as people like to say, feels he needs to speak out about cryptocurrencies. As I said, it’s not really because of bitcoin, it’s because of Facebook’s Libra.
Here’s why (from an article I wrote in June):
Libra will be pegged to a basket of currencies and assets. Which currencies it includes in this basket and in what proportions will have huge political consequences.
Think about it, right now the US dollar is essentially the world’s reserve currency. Well what if Libra really takes off, and becomes commonly used by Facebook’s 2.3 billion customers?
All of a sudden Libra is a very important currency, and what it is backed by becomes very important.
As I wrote earlier, all currencies used to be backed by gold. And this gave gold holders power. It also led to the US enacting Executive Order 6102 and taking all its citizens’ gold under pain of ten years in prison, during the great depression.
Imagine if Libra has a big proportion of the Chinese renminbi in its basket. That certainly wouldn’t make the US very happy.
As you can see, right now Facebook’s Libra poses a much bigger problem to the political elite than bitcoin ever did.
And here’s why, no matter what happens with this situation, it’s good for bitcoin.
From another article I wrote in June:
Facebook is not dumb. It will have known exactly how much hate this move was going to draw long before it went public with Libra. And it will have known it could withstand it.
So although the crypto community isn’t happy with Facebook right now, perhaps in another year or so it will be.
Because, as Erik Voorhees, CEO of crypto exchange ShapeShift, said:
Basically, all the ire of the establishment is now focused on Libra.
And Libra has the backing of some of the biggest and most powerful companies in the world.
These companies are essentially the only entities with enough resources to push back against the establishment.
I see this whole affair as a win-win for crypto investors and enthusiasts.
If Libra manages to push back against the banking and political elite, it could carve out a solid foundation for crypto to build on.
And if Libra loses and has to call it a day, it will prove how powerful truly decentralised projects like Bitcoin and Ethereum are.
Because these projects are decentralised, they cannot be shut down. No one even knows who created Bitcoin. It’s not like you can throw Satoshi Nakamoto in jail. And even if you could, it wouldn’t do anything to the Bitcoin network itself.
Libra, on the other hand, is not decentralised. Facebook and its cabal are legally responsible for it. They can be ordered to cease and desist. They can be ordered to shut it down.
Which brings us to another favourite meme of the crypto community:
Could the POTUS really inadvertently send bitcoin on a journey to $100k by 2022? I guess time will tell.
In the meantime, if you have any interest whatsoever in making money from crypto, you need to see my colleague Sam Volkering’s crypto webcast at 2pm tomorrow.
Sam really couldn’t have picked a better time to go public with this, given all that’s been going on with crypto over the last couple of months.
He covers what is happening to crypto markets right now, why it’s happening, what he believes will happen going forward – and perhaps most importantly, how you can make money from it.
In fact, he’s revealing two crypto plays he believes could turn £50 into as much as £10,000.
So if you want to see what all the fuss is about, get your name down here while there’s still time.
Until next time,
Editor, Exponential Investor