When it comes to the official acceptance of Bitcoin across the globe, Bitcoin price has faced a pretty hard time since its inception back in the year 2008. In the latest series of the events, one of the most powerful personalities of the world, Donald J. Trump, the President of the USA, has shown his disinterest towards the burgeoning world of Cryptocurrencies in a Twitter thread stating the following:
Trump has highlighted one of the basic “flaws”, as some traditional financial gurus would like to term it, of volatility in the Cryptocurrency space. Bitcoin price and most “pure” Cryptocurrencies are not backed by any physical commodity such as gold, oil, etc. as that creates dependency. Although lack of physical backing makes it very different than the fiat system but it is also the factor that results in extreme spikes and drops in the Bitcoin price. The price of Bitcoin is solely based on speculation alone that believes it to carry value. Due to such faith-based price control with no backing, Bitcoin price has taken a surge and even drops have been experienced in the past. The uncertain Bitcoin price level is also the reason why Bitcoin has not gained mainstream adoption as the preferred payment method. Besides this, there is not much regulatory clarity around Bitcoin yet.
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Bitcoin rose to the financial scene after the financial crisis of 2008 that had been experiencing by people then. Its initial use-case was largely driven by its usage in illegal activities, such as the money laundering, and illegal online marketplaces such as the dark web. The reason for illegal usage largely arises from a lack of regulation around the digital asset. Since Bitcoin is a technological innovation, there is not a concrete regulatory framework to properly classify the asset and Bitcoin price. Many scam Initial Coin Offerings (ICO) used the lack of regulation to their advantage raising huge amounts of money without the regulatory oversight.
Many investors have been scammed in this space, which is part of the reason why the media and official bodies across the globe are skeptics of the asset. Illegal activities have explained why Trump has taken such a negative stance against Cryptocurrency. Adding on, Trump further went on to map out the future possibilities for Facebook’s Libra Cryptocurrency stating the below:
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The co-relation between banks and Cryptocurrency is important here. Cryptocurrencies make their case against the centuries-old and centralized system of fiat banking by presenting forward a decentralized internet-based monetary framework that is free from any central party influence. Cryptos present a financial system where the people are in control while the debt-based inflation-oriented system of banking is rebuffed. Cryptos are trying to gain people’s trust in favor of a decentralized monetary system, the exact thing that the banks do not want. Cryptos possess the prospect of making banking obsolete, where the challenge is here and is hence too steep. In short, cryptos and banks don’t just go together, however. Finally making the case for the U.S. dollar, Trump said the following:
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