Not that long ago, economist Tyler Cowen told bitcoin to “put up or shut up.”
Following the cryptocurrency’s ridiculous ascent during the first half of the year, the George Mason University professor finds himself forced to begrudgingly admit that the nascent asset is “probably here to stay.”
And he says you can thank Elizabeth Warren for that.
Writing in a Bloomberg Opinion column, Cowen lays out his best explanation for the bitcoin price’s triumphant – and breakneck – march to as high as $13,880 this week from a low of $3,122 in December 2018 (prices from Bitstamp).
He fingers most of the usual suspects. The US-China trade war. Facebook’s Libra cryptocurrency. Geopolitical risks in the Middle East and elsewhere.
However, there’s one suspect in his lineup that sticks out: Elizabeth Warren.
Well, not just Elizabeth Warren. Really the entire Democratic party – or at least what you see of it on Twitter. And on the debate stage.
“[T]he Democratic Party in the U.S. continues to shift to the left, including on the possibility of a wealth tax. As America’s fiscal deficits grow (due often to the Republicans, I might add), there will be a long-term need to restore fiscal sanity. Presidential candidate Elizabeth Warren, for one, advocates a 2% wealth tax (over $50 million) toward this end.”
Many wealthy Americans won’t take kindly to that wealth tax. The easy solution? An uncensorable asset like bitcoin that ignores international borders.
It’s not surprising to see the libertarian-leaning Cowen take aim at progressive fiscal policies.
However, Tyler Cowen is nothing if not a straight shooter, and he notes that growing deficits – and the future tax hikes required to address hem – are bullish for bitcoin, no matter what one believes about the federal programs those deficits are bankrolling.
“No matter what you think of this idea, it likely would boost the demand for Bitcoin and other crypto assets, as cryptocurrencies are potentially a way to store assets out of reach of many tax authorities….. In essence, the new and higher price of Bitcoin is telling us that fiscal solvency will be hard to come by, and the wealthy will not give up their assets without a fight.”
So there you have it: A Warren presidency could represent bitcoin’s best-case scenario (Sorry, Andrew Yang).
And the most ironic part? Elizabeth Warren has been one of Capitol Hill’s most vociferous crypto critics.