Trump quipped that he doesn’t believe that digital assets are money, adding that they are also known to be very volatile and “based on thin air”. The President went on to argue that cryptocurrencies can and do “facilitate unlawful behavior”, citing its use in the drug trade and “other illegal activity”.
In a three-part thread, Donald Trump lambasted cryptocurrencies, even setting his sights on Bitcoin. The American leader tried to dismantle the value proposition of not only decentralized cryptocurrencies — such as and namely Bitcoin — but Facebook’s Libra too.
He even took some time to poke the Libra crowd, claiming that the association should abide by “all Banking Regulations”, and that the U.S. Dollar should be the world’s strongest currency.
A BTC Ban Possible?
This sudden tweetstorm left many wondering, is Trump looking to ban Bitcoin? And more importantly, would it even be possible for the American leader to take such drastic action?
According to one prominent crypto researcher, no and yes. In a recent Twitter thread, Alex Kruger, an economist and known industry analyst, laid out his thoughts on the potential for a ban of Bitcoin and maybe other cryptocurrencies in the United States.
Via the 16-part thread, Kruger explained that technically, the U.S. president cannot ban code, which Bitcoin is. What Trump can do, however, is to ensure that the government targets fiat onramps into this ecosystem. For instance, U.S. financial regulators could determine cryptocurrencies, even Bitcoin, too risky to be sold to retail investors; and the President could even issue an executive order disallowing those from dealing with BTC, but he would need to find a valid reason in the Constitution or legislature.
Kruger sees three main reasons why the government would want to crack down on the cryptocurrency. 1) cryptocurrency represents a clear threat to the banking system, as made evident by the anti-Libra stance by governments the world over; 2) digital assets hurt Washington’s ability to impose economic sanctions; 3) as Trump stated, Bitcoin and its ilk can be used to facilitate illicit activity, like laundering proceeds of contraband sales and evading taxes.
Despite these reasons to ban cryptocurrency, Kruger notes that such a step would be unlikely. Even if a ban manages to occur, the economist notes that the ban would be overturned.
This aside, Jeremy Allaire, the chief executive of the Goldman Sachs-backed Circle, suggested that Trump’s tweets — yes, tweets — are potentially the “largest bull signal” for Bitcoin of all time. As he explains, no longer is Bitcoin an asset for the fringe. Now, it exists in the mainstream, as more likely than not, this single Twitter thread, exposed to upwards of 68 million Twitter users, will trigger global political and economic discussion on the matter. And by simple virtue of curiosity and the so-called “Lindy Effect”, this space could grow rapidly.