Before you write this idea off as outlandish, consider that most people were taken by surprise when the government recently outlawed flavored e-cigarettes. Then take a look at American history as it relates to the ownership of gold: on April 5, 1933, President Franklin Delano Roosevelt signed into law what’s known as Labeled Executive Order 6102, which includes “forbidding the hoarding of gold coin, gold bullion, and gold certificates within the continental United States.”
That’s right: one of the most respected American presidents in history banned the hoarding of physical gold as well as the 1930’s version of paper gold. Owners of any of these forms of gold were required to exchange it for U.S. dollars at the prevailing rate (back then) of $20.67 per ounce; violators were subject to fines of up to $10,000 (a heck of a lot of dough in 1933) along with up to 10 years in prison.
Soon afterwards, President Roosevelt increased the official price of gold to $35 per ounce; remember, they had just forced Americans to sell it to the government at $20.67. Lesson learned: never underestimate the government’s willingness to secure profits at the expense of the citizens.
Another lesson to be learned is that governments won’t hesitate to outlaw, or at least threaten to outlaw, what they perceive as a threat. That, then, begs the question of whether the American government sees Bitcoin and cryptocurrency generally as a threat. In regards to that, no one can accuse Trump of filtering his views on crypto:
In this same series of tweets, Trump railed against Facebook’s upcoming Libra Coin and declared that the U.S. dollar is dependable, reliable, and the “only one real currency in the USA.” This was historic in the sense that Trump is the first American president to take a categorical stance on cryptocurrency.
A few days after that series of presidential tweets, Congress grilled David Marcus, the head of the Libra Project, as if he were himself committing a federal crime. Also at around that same time, Treasury Secretary Steven Mnuchin declared that “Bitcoin is highly volatile and based on thin air,” adding that “we are concerned about the speculative nature of Bitcoin and will make sure that the U.S. financial system is protected from fraud.”
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The timing of these governmental critiques was “interesting,” to say the least: Bitcoin had ascended from $3,200 to $13,500 in a matter of months, threatening to climb out of the 2018 bear market entirely and embark on a stunning bull run. The concerted government attack on crypto seems to have placed the Bitcoin price surge on pause, at least for the time being.
But that won’t last forever, and while Bitcoin might be taking a breather for now, it’s not likely to stay at the current price level for much longer. The government might not like the blockchain revolution, but big business is involved now: large companies like Visa, MasterCard, PayPal, Uber, eBay, and Spotify have each contributed $10 million or more towards the Libra Project.
Now, I’d like to believe that these businesses have truly bought into the grassroots movement that made cryptocurrency the revolutionary economic movement it has become: anti-inflationary, anti-establishmentarian, and ultimately pro-freedom as there is no liberty without financial self-determination.
Only a fool, however, would believe that a leviathan like Visa or MasterCard would have anything besides a profit-centered motive in mind – which is fine with me, as long as they’re getting on board and financially supporting the cause. They certainly weren’t early movers in the crypto space, but they’ll play along because they have no choice at this point.
You’ll play along, too, when your friends, family, neighbors, and co-workers eventually accept cryptocurrency as their primary payment and transactional methodology. Until then, as targeted and deliberately scarce asset, crypto will retain its street cred and mystique – enjoy it, if you will, while it lasts.
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