But that isn’t stopping Circle CEO Jeremy Allaire from reassuring the crypto faithful that Bitcoin remains an “attractive” safety blanket from global economic uncertainty.
Following President Donald Trump’s announcement late last week that $300 billion in new tariffs would strike several new products from China, Bitcoin jumped into the $11,700 range. Meanwhile, the stock markets showed signs of stress and decline—a scenario which appeared to reinforce the idea that a growing number of people may view Bitcoin as a form of “digital gold” to preserve their wealth in times of economic crisis.
Since then, the price has died down a bit as concerns regarding the trade war have begun to subside. Just yesterday, Bitcoin was trading at $10,300, a drop by roughly $1,400 since early August, though it’s now moved up to about $10,700.
But despite those sharp ups and downs, Allaire believes Bitcoin is still a “safe haven” asset: “Clearly, a non-sovereign digital asset like bitcoin is attractive to people who are interested in moving capital into a place where they can control it themselves,” he told CNBC this morning.
“That underscores a lot of interest that’s been there over time. It’s the digital gold thesis, and I think a lot of both institutional accumulators of bitcoin, individuals, very specifically individuals in jurisdictions or environments where the intense concern about capital controls are there. That’s an underlying thesis that I think has had an impact on it for the last eight years,” Allaire said.
One of his suggestions for the recent volatility is that traders are looking to cash in following steady gains. “Last week […] you saw there were a lot of holders whose broader portfolios were taking a hit,” he explained. “Obviously, Bitcoin is up over 100 percent, almost 200 percent over the past nine months or so. That’s a place to take some gains as well. Depending on the type of holder, you’re going to see slightly different behaviors during these market moves.”
The crypto industry as a whole has enjoyed some newfound attention in recent months following Facebook’s entry into the space with Libra, which also means renewed interest from lawmakers and regulators. In a recent hearing before the Senate Financial Committee, Allaire spoke of the present financial system, which he says hinders everyday people from access to standard capital. He said at the time that blockchain technology can tackle this challenge granted it “develops responsibly.”
In this vein, Allaire’s Circle has garnered money transmission licenses in approximately 48 states, including New York’s rigorous (some might even say “onerous”) BitLicense. Allaire has said that many companies are working hard to meet compliance needs and do what’s right, but one major problem is that applicable laws have yet to be updated to meet present conditions.
Allaire told CNBC today, however, that he believes governments around the world are now paying much closer attention, particularly the Group of Seven (G7) nations of Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States:
“Crypto as an agenda item is absolutely on the docket,” he said. “It’s becoming a major topic not just because of the continued growth of things like bitcoin but also the growth in stablecoins like USD Coin and Libra.”
Following President Donald Trump’s announcement late […]