Why Bitcoin Investors Are Taking the U.S. Treasury’s Crypto Quip in Stride
Just five years ago, Bitcoin (BTC) being mentioned by some of the biggest names in finance and politics was a quixotic dream. Now, this dream is coming to a reality.
Ever since the cryptocurrency market rebounded in late-2018, investors, politicians, and technologists have begun to realize that Bitcoin is not going to die. And thus, they’ve sprung out of the woodwork to issue comments on the matter.
Related Reading: A City in Canada to Accept Crypto Assets for Tax After Council Approval, Bolstering Adoption
Just a week after one of the world’s most powerful individuals, U.S. President Donald Trump, dropped the “Bitcoin” bomb, Steven Mnuchin did too.
As reported by NewsBTC previously, the American Treasury Secretary was fairly bearish on cryptocurrencies, mentioning their ability to be used by criminals for illicit activities, like money laundering, the sale of illicit drugs, and hacking.
With this in mind, Mnuchin dubbed cryptocurrencies, like Bitcoin, a “national security issue”, keeping his statement blunt.
He went on to conclude that companies dealing with this asset class should comply by the rules that many “traditional financial institutions” abide by. Mnuchin explained:
“The United States Treasury has been very clear to Facebook, to Bitcoin users, and to other providers of digital financial services that they must implement the same [rules] as traditional financial institutions. The rules governing money-service providers apply to physical and electronic transactions alike.”
Overall, this may seem bearish. But, many analysts and investors have taken this comment in stride. In fact, the cryptocurrency market is up in the past 24 hours, not cratering as some bearish traders expect.
Then They Fight You
As Yan Pritzker, the founder of Inventing Bitcoin, notes, as it stands, BTC’s market capitalization is 6% that of M0 (base money supply) of the U.S. Dollar.
He notes that the fact that Donald Trump and Mnuchin have felt the need to address Bitcoin, despite the fact that it is such a relatively small asset, confirms that BTC is actually growing.
Bitcoin’s market cap is 6% of the USD M0 money supply. That the president and treasury secretary feel compelled to speak out about it at this point validates that we have firmly departed the “then they laugh at you” phase.
— Yan Pritzker (@skwp) July 15, 2019
Referring to the four phases of adoption ignoring, laughing, fighting, and winning Pritzker notes that the recent press conference on cryptocurrencies confirm that Bitcoin has “firmly departed the ‘then they laugh at you’ phase.” You see, the government wouldn’t be fighting back if they didn’t see BTC as a threat.
Digital Currency Group’s Barry Silbert echoed these thoughts, noting that Mnuchin’s surprise address about this budding asset class is a “complete and total validation of Bitcoin.”
Complete and total validation of bitcoin
— Barry Silbert (@barrysilbert) July 15, 2019
Indeed, with the Treasury now eyeing the cryptocurrency space, it would be hard to deny that Bitcoin and its ilk are not a global trend that needs to be addressed.
Bitcoin Acknowledges as “Store of Value”
What’s more, during his presentation and Q&A session, Mnuchin purportedly gave Bitcoin a nod as a speculative store of value. If true, this would mark a massive step forward in the public’s knowledge of the cryptocurrency.
You see, for most of the asset’s life so far, it has been deemed a criminal’s coin, used for nothing else but things that aren’t kosher. But, with Mnuchin acknowledging it as a viable asset, maybe even a proper store of value, it becomes validated in the eyes of millions of American citizens.
The Chairman of the Fed and the Treasury Security both agree that Bitcoin is a speculative store of value.
Both of them, along with the President, agree that Libra and Bitcoin are two very different things.
— Travis Kling (@Travis_Kling) July 15, 2019
This comes shortly after Jerome Powell of the Federal Reserve made a similar comment in front of a group of lawmakers.
The fact that two of the most important individuals in American finance gave Bitcoin their thumbs up as a store of value, a volatile one that is, shows that the mainstream is starting to understand this revolution in technology and finance. This is “wildly bullish” according to Ikigai’s Travis Kling.
Drops Chance of Crypto Ban to Near-Zero
Also importantly, industry researcher Alex Kruger believes that the odds of there being a U.S. “Bitcoin ban dropped from extremely low to almost zero” following this press conference. Kruger dubbed Mnuchin’s comments a “nothing burger”, presumably because what was said could be classified as givens.
The analyst is presumably mentioning this because Mnuchin basically stated that as long as users and firms comply by the rules, Bitcoin is fine by the Treasury.