When Donald Trump unleashed a savage bitcoin takedown on Twitter last week, a weird thing happened. Traders shrugged. If anything, the bitcoin price went up a little.
This was a significant moment.
With that one tweet, bitcoin proved that it works as designed; a currency that exists outside of government influence.
It’s the only market Donald Trump can’t crash with a tweet.
To understand why this is so important, let’s take a look at what usually happens when Trump attacks a company, asset, or currency on Twitter.
When Trump went after Amazon in March last year, the stock fell 5 percent within minutes of his threatening tweet.
In early May this year, Trump sent a tweet threatening fresh tariffs on China. The S&P 500 sank 1.5 percent in a day and spent the rest of May in free-fall.
Trump’s power to move markets is astonishing. He wiped $1.2 million off Toyota’s stock in five minutes and he crushed the peso with a simple threat.
But in a week where the president of the United States, the chairman of the Federal Reserve, and the Treasury Secretary all struck a cautionary tone on cryptocurrencies, bitcoin was resilient.
Bitcoin did suffer a price fall on Sunday night and the mainstream press was quick to rush in and pin it to Trump’s tweets.
But just think about it for a minute. Trump’s tweet was arguably the most significant government intervention in the history of bitcoin. Do we really think traders waited three days to sell the news? No way.
Like any other market, bitcoin reacts immediately. Senior analyst at eToro, Mati Greenspan explained further in a recent interview with BloxliveTV. Asked whether Trump’s comments caused a price slump, he said:
“Absolutely not… this is completely absurd… this is one of those classic cases of price movements looking for a news event to be attached to.”
Look at the immediate reaction to Trump, Powell, and Mnuchin’s bitcoin comments, and you’ll see a spike of buying.
Bitcoin’s Sunday night drop had nothing to do with Trump and everything to do with technicals. The shift down was a typical move well within bitcoin’s current price range. A bout of Sunday night selling is a usual pattern for bitcoin as traders battle for a weekly close above or below resistance levels.
Bitcoin’s resilience to Trump’s tweet simply proves its use case. Bitcoin can’t be manipulated by central banks. It isn’t beholden to any one government. It exists as global asset beyond the scope of any sitting president.
As CCN.com reported, Trump could, of course, take action against bitcoin. He could ban bitcoin with an executive order but it would be wildly unpopular with his base. More likely, he could choke US crypto exchanges like Coinbase and Gemini.
No doubt the price would temporarily crash if that happened. But remember that bitcoin is bigger than America. Crypto entrepreneurs will gravitate elsewhere, just like they did when the Chinese government cracked down. The genie is out of the bottle and it will be impossible to put back in.
Last modified: March 4, 2021 2:38 PM