President Donald Trump seems determined to boycott the bitcoin market and other cryptoassets. But, interestingly enough, the result has been the opposite of the expected, if compared with the devastating effects of his tweets on companies in the American stock market, sovereign currencies from other countries and even China.
The U.S. Treasury Secretary, Steven Mnuchin, mentioned that the Trump´s Government has “very serious concerns” about the Libra, the cryptocurrency of Facebook. He addressed the subject as a national security issue, in an interview with reporters at the White House.
“We will not allow that digital asset services providers operate in the shadows,” he stated.
He had also strongly criticized the cryptocurrencies, echoing the President´s speech that said: “there isn´t money”. “We are concerned about the speculative nature of the bitcoin and we’ll make sure that the U.S. financial system is protected against fraud.”
This is not the first time that Trump’s government tweets or statements from his administration turn against a sector of the economy. See the case of the Amazon occurred at the end of March earlier this year. The President dropped the multinational stocks in more than 5% with a single Tweet in which he stated that the company should pay billions of dollars to the U.S. postal service, as it takes advantage of its services (according to his opinion) without paying the appropriate slice of taxes.
In May this year, Trump again attacked on Twitter stating commercial threats against China. What happened? The S&P 500 index fell 1.5 percent on that day and remains in free fall through the remainder of the month.
Trump criticizes the bitcoin and it appreciates
After several statements, the price of the bitcoin had a slight appreciation of about 3%, proving the resilience of the asset and confirming one of its purposes
head de Legal and Trade da Transfero Swiss AG
And what about the bitcoin? Well, in the same week the President of the largest world power, the Chairman of the American Central Bank Board and its Treasury Secretary have publicly expressed in an alarmist tone concerning the sector, the effect was the opposite. After several statements, the price of the bitcoin had a slight appreciation of about 3%, proving the resilience of the asset and confirming one of its purposes: to exist and work completely outside the purview of Governments and their unmentionable interests.
Although the bitcoin has suffered a price adjustment a few days after the statements, it is not possible to say that there is a causal link between the statements and the subsequent retreat in the price of the bitcoin. Usually, the market doesn´t take days to value statements, so that the fall in the price of the BTC is associated with other factors. According to the 2016-2017 standards, valuations of the bitcoin are succeeded by devaluations around 30%, and it is more likely that the current adjustment is due to the previous high-cycle observed.