TRAPDOOR PULLED: WTF Happened to Bitcoin?
Full disclosure: Bitcoin investing isn’t for wusses, plain and simple. If you can’t handle 5% and sometimes 10% daily moves in either direction, you might as well put your money in U.S. Treasuries and pray that bond yields aren’t pushed to zero in 2020. This week was a warning that this isn’t going to be a cakewalk.
The $9,000 support level felt pretty comfortable for a while. But of course, as soon as you get comfortable, the rug always gets pulled out from underneath. You’ve got to stay alert and pay attention – otherwise, the trapdoor gets pulled every single time.
In a hearing before the U.S. Senate Committee on Homeland Security and Governmental Affairs, Mitt Romney just had to open his big mouth and spill out his negative view of crypto – which, by his own admission, he knows nothing about. In fact, he actually prefaced his rant with “I don’t begin to understand how cryptocurrency works.”
Then Romney claimed that “we can’t follow the money” and “the money is hidden from us,” both of which are false because Bitcoin is the most transparent money that exists right now. Then he asked whether there should be “some kind of effort taken in our nation to deal with cryptocurrency,” whatever the heck that’s supposed to mean.
FBI Director Christopher Wray took the bait, calling cryptocurrency a “significant issue” and raising the possibility of “some kind of regulation.” The notion of an FBI crackdown evidently shook out some of the weaker hands in Bitcoin:
At almost the same exact time, Australian Minister of Home Affairs Peter Dutton proclaimed that terrorists are exploiting cryptocurrencies to “fund their deadly missions.” Much like with the regulatory grandstanding in the U.S., actual evidence was in short supply in Australia but the scapegoating continues unabated.
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Why are governments so protective of their precious fiat money? Understand that government money is used as a weapon; for instance, the U.S. has weaponized the dollar for sanctions against other countries as well as in the currency war against China.
Bitcoin, in contrast, is known as the people’s money, not as a weapon of war. And unlike the dollar and other fiat currencies, which often lose value during the settlement process, Bitcoin is frictionless: it doesn’t require settlement, as it’s automatically self-settling at the time of the transaction.
Politicians don’t understand any of that, nor do they understand the job-creation value of cryptocurrency. The growth rate has been incredible:
- Cryptocurrency and blockchain jobs per million increased by 1,457% from 2015 to September 2019.
- During that time frame, the share of searches per million surged 469%.
- Cryptocurrency and blockchain job postings increased by 214% from 2017 to 2018.
- The number and percentage of job postings continue to increase in 2019.
It takes insight to see that Bitcoin is still moving forward even when there’s a short-term price dip. I’m not expecting politicians on Capitol Hill to understand any of this – as long as you know the facts and have a plan of action in place, that’s all that really matters right now.
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This work is based on SEC filings, current events, interviews, corporate press releases and what we’ve learned as financial journalists. It may contain errors and you shouldn’t make any investment decision based solely on what you read here. It’s your money and your responsibility. The information herein is not intended to be personal legal or investment advice and may not be appropriate or applicable for all readers. If personal advice is needed, the services of a qualified legal, investment or tax professional should be sought.