President Trump yesterday slammed cryptocurrencies, singling out bitcoin (BTC) and Facebook Libra in particular. The US president stated in a tweet time stamped at 5pm ET that “unregulated crypto assets possess the ability to facilitate unlawful behaviour”. Having rallied from a week low of $11,187 to $11,532 late evening on Tuesday July 11, bitcoin was beginning a bounce back prior to the President’s tweets.
In under an hour on June 12 at 8.15pm ET (1.15am BST), the bitcoin price dropped £500 in 45 minutes, before another surge brought prices back to the $11,400 level.
Bitcoin was trading at £9,302 ($11,660) at 9.45am BST on July 12, 2016, according to Coindesk.com data, suggesting the President Trump’s tweets are having had little effect on short-term traders.
Late Thursday evening the president took to Twitter to offer his sentiment on digital assets, highlighting his administration’s stance on crypto.
President Trump tweeted: “I am not a fan of Bitcoin and other cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air.
“Unregulated Crypto Assets can facilitate unlawful behaviour, including drug trade and other illegal activity. Similarly, Facebook Libra’s ‘virtual currency’ will have little standing or dependability.
“If Facebook and other companies want to become a bank, they must seek a new Banking Charter and become subject to all Banking Regulations, just like other Banks, both National and International.
“We have only one real currency in the USA, and it is stronger than ever, both dependable and reliable.
“It is by far the most dominant currency anywhere in the World, and it will always stay that way. It is called the United States Dollar!”
Mr Trump’s tweets are a fiery response to the continuing debate over how to adequately regulate Facebook’s Libra digital asset.
Crypto markets will most likely face more regulation and increased attention from policy makers by reflecting that in bitcoin’s value.
The phenomenon underscores bitcoin’s newfound resilience to external criticism.
This has been interpreted as hardening this year as the crypto markets continue to prove the sceptics wrong.
Among investors, however, almost all the attention was on Trump, with many in fact thanking him for drawing attention to the industry and proving it did not need his support.
One popular response read, sharing data from Google Trends: “Well done Donald Trump for bringing more awareness to bitcoin.”
The news came as the US Federal Reserve issued an unexpected change in tone regarding Facebook Libra.
eToro senator market analyst Mati Greenspan wrote yesterday: “The last time he was asked about Libra, Fed Chairman Jerome Powell stated that he did not feel that it posed a risk but yesterday it was quite clear that the Fed is now on high alert.
“The crypto community feels very strongly that the Libra project is bullish for bitcoin as it is attracting mainstream attention to the space and may one day create a new gateway where people will be able to buy bitcoin with Libra.
“So, the Feds call for increased oversight certainly has the potential to delay this from happening.
“In my mind, bitcoin should probably be reacting to the headline news that the Fed is cutting rates and supplying more liquidity to the market.
“More liquidity means more money for investments, which should send the price up, but what do I know?”