US President Donald Trump revealed his pejorative view on cryptocurrencies on Thursday, claiming that they are “based on thin air”.
While on the surface the attack may seem like a negative for Bitcoin and the digital asset space, it actually exemplifies why cryptocurrencies were created – to take on traditional financial systems.
In fact, the price of Bitcoin actually rose by 5% following Trump’s comments, spiking to $11,700 after a slump to below $11,000.
Fed chair compares Bitcoin with gold
Earlier this week, Federal Reserve chairman Jerome Powell likened Bitcoin to gold before stating that it’s possible Bitcoin may become a reserve currency in the future.
“Bitcoin’s a good example. Almost nobody uses Bitcoin for payments. They use it more as an alternative to gold. It’s a store of value, a speculative store of value like gold,” Powell explained.
“People have been talking about this [becoming a reserve currency] since cryptocurrencies emerged, but we haven’t seen it. That’s not to say we won’t see it, and if we do see it we could return to an era in the United States where we had many different currencies, in the so-called national banking era.”
Unsurprisingly, and not for the first time, Trump disagreed with Powell. The pair have been battling it out throughout 2019, with Powell facing criticism from Trump for not cutting interest rates.
‘Crypto facilitates unlawful behaviour’
One of Trump’s remarks about Bitcoin was that it “facilitates unlawful behaviour”.
The irony is that the majority of global crime is facilitated through the US dollar, which was reiterated by this week’s seizure of 20 tons of cocaine from a ship owned by banking giant JP Morgan.
Through the use of blockchain forensics, Bitcoin and other cryptocurrencies are actually far more traceable than cash, which leaves no digital footprint.
Each and every Bitcoin transaction, whether illicit or not, is logged