Could Trump ban Bitcoin? Global markets analyst Alex Krüger has plotted out a scenario where the president-elect might just follow through with such an idea. Krüger's speculation comes after Twitter rampaged last week thanks to Trump's Bitcoin-bashing tweet.
Breaking: Donald Trump Bashes Crypto, Says He's No Fan of Bitcoin https://t.co/YOgWV9sXNK
— CCN Markets (@CCNMarkets) July 12, 2019
Of course, Bitcoin was built to deter such an onslaught but that may not be enough to stop the Trump from trying anyway. Unfortunately for him, he would face up against a number of serious legal and constitutional hurdles.
The U.S. Government Cannot Ban Bitcoin Because Bitcoin is Free Speech
The U.S. has some of the most robust free speech laws anywhere on the planet. If Trump steamrolled down the path of a Bitcoin ban it wouldn't be the first time the government tried to contain controversial source code.
In a landmark case in 1996, judge Marilyn Patel ruled against the Clinton administration who tried to block publication of an encryption program developed by mathematician Daniel Bernstein.
The State Department had three years earlier laughably ruled that Bernstein could only publish the program if he first registered as an international arms dealer. Apparently secure, private communication is as dangerous as selling lethal weapons.
ReasonTV revisits the fascinating ruling:
“That's because Bitcoin is just code and code is just speech...Ultimately the 9th circuit court affirmed Patel's ruling that code has the same constitutional protection as a poem or newspaper article.“
More on that here:
Socialism Revisited - Let's Confiscate Your Crypto Assets
In the current polarized political climate, it pays to remember a time when the government seized another hard asset - gold. As Krüger points out: “Trump could plausibly find a valid reason to ban dealing in Bitcoin.“
In 1933 president Roosevelt banned the private ownership of Gold. All confiscated commodity was bought from the public on the cheap and then conveniently repriced 70% higher. The government made off with massive profits in what can only be described as an official heist.
Admittedly, going after Bitcoin, in the same way, would be pretty hard to pull off. But while Bitcoin is somewhat trackable, actually enforcing large-scale confiscation of it would be a logistical nightmare.
Instead, as Krüger speculates, Trump may put pressure on exchanges and banks or a centralized player like Facebook who they can more easily manipulate.
The Likely Path of a Trump Bitcoin Ban
Trump may have inadvertently started a chain of events he won't be able to back down from. When the orange president sets his mind on something he's unlikely to take a different course. Krüger theorizes that the chain may look something like this:
- A Bitcoin ban in the US is feasible
- Ban could come via a Trump executive order
- Ban could be over-turned
- Probability of a ban is extremely low
- Probability increased last week
- Regulatory risk keeps many institutions away
- A ban would see $BTC crash rapidly pic.twitter.com/VEz5y58arL
— Alex Krüger (@krugermacro) July 15, 2019
Finally, and perhaps most controversially, Krüger suggests that Bitcoin would probably crash in the unexpected event of a Trump ban:
“Many somehow think a U.S. ban would actually be a bullish event. They are welcome to buy more BTC if the U.S. announces any sort of ban. I'll be on the other side of that trade.”
There's a reason that 1 Bitcoin costs $10 000. People don't trust the government or its ludicrous money-printing regime. Being a seller more often than a buyer in this market will probably get you rekt.