The cryptocurrency market may be red and gloomy as this week starts, but anybody involved in this market should be used to that by now. Last week President Trump posted some rather negative tweet about bitcoin, saying he wasn’t a fan of it, but it wasn’t this that resulted in the recent price correction.
The content of Trump’s tweets are not so important in themselves, instead there is another way to look at them, as Michael J. Casey at Coindesk explains. He writes, “What matters is the very fact that a sitting president mentioned cryptocurrencies at all. Indeed, from a price perspective, Trump’s disparaging remarks are, on balance, positive for bitcoin.” And he adds that by Friday evening this was clear in the post-tweet price behaviour of bitcoin.
He argues, “More importantly, the tweet marks a symbolic milestone in the gradual but ever-expanding presence that cryptocurrency occupies in the public conversation around money and policy.” And he also thinks “It marks the starting point in a titanic battle over the shape of our global money system.”
Bitcoin and other altcoins must be relevant in order to be successful. He claims that the fact it is being so hotly discussed in government circles, not just Trump’s Twitter feed, points to the fact that it does indeed have relevance, or they wouldn’t be talking about it. Casey says, “By simply giving it the time of day, Trump revealed that people within the high levels of the U.S. power structure are noticing the challenge that cryptocurrency technology poses to it.”
He believes that it is important to note that the President’s tweet came shortly after one of his long-term ‘enemies’, Federal Reserve Chairman Jerome Powell, who tweeted that bitcoin was better used as an alternative to gold, rather than as a payments system.
Facebook’s Libra is another battleground for Trump and some members of Congress who see it as a potential usurper to the US dollar. Casey claims that Trump’s tweet about Libra “looked suspiciously as if it had been drafted by someone with interests in the banking sector.”
But Casey also points to the fact that Trump uses twitter as his main vehicle for communicating with the world. Significantly, Twitter is filled with crypto supporters who responded to his posts with “its special mix of snark, humour and passion.”
Will the President make more comments? Anything is possible, but his tweets this time had perhaps the opposite effect to that which he intended. That’s interesting in itself.