Bitcoin has been around for roughly ten years now, but many people still don’t understand its underlying value proposition. Those who are bullish on the bitcoin price point to the “digital gold” meme and how the asset can act as a global, apolitical store of value and medium of exchange, but this concept can be somewhat difficult to wrap one’s head around.
For some, the only way to understand Bitcoin is to see examples of how it can be useful in the real world. And that’s where U.S. President Donald Trump can be of some assistance (and no I’m not talking about Trumpcoin).
Although Trump recently tweeted that he is not a fan of either Bitcoin or Facebook’s Libra cryptocurrency project (let’s ignore how these projects are nothing like each other for now), the president has been invaluable as an educator to the masses as to why Bitcoin needs to exist.
Bitcoin is often touted as a useful tool mainly for those who live under authoritarian regimes with limited financial freedoms, but many of Trump’s actions and statements during his presidency have illustrated why Bitcoin is useful as a hedge against the legacy financial system.
1. Currency Wars
Although Trump ridiculed the use of low interest rates and quantitative easing in the past, he has recently been calling for a devaluation of the U.S. dollar — even going as far as to threaten to fire Federal Reserve Chairman Jerome Powell.
Of course, as many financial pundits have pointed out, the U.S. Government will eventually have no choice but to paper over their out of control spending habits, as there appears to be no end to Congress’s addiction to spending money the taxpayer doesn’t have.
Trump’s key reasoning behind his desire for lower interest rates is that every other central bank appears to be doing it.
The combination of easy monetary policy around the world with the upcoming Bitcoin halving event next year was described as a “perfect storm for Bitcoin” by multiple speakers at last month’s Bitcoin 2019 conference in San Francisco. The idea is investors will search for alternative stores of value, such as gold and bitcoin, as central banks around the world continue their collective race to the bottom.
This uncertainty around global monetary and fiscal policy could at least partially explain the renewed interest in Bitcoin from retail investors and Pantera CEO Dan Morehead’s claim that there’s a good shot a $42,000 Bitcoin could happen in 2019.
2. Threats to Block International Remittances
In a perfect illustration as to why a censorship-resistant means of digital payment is necessary in the world, President Trump has threatened to restrict the ability for individuals in the United States to send money to their families in other countries on multiple occasions.
Trump first made this sort of threat during his 2016 run for president. His plan was to limit remittances sent to Mexico in an effort to persuade the Mexican Government to pay for a border wall between the two countries.
Notably, Bitcoin mining company Genesis Mining mocked Trump with a billboard after he made those claims.
In April of this year, the White House told reporters that it planned to target remittances in an effort to tackle a flood of migrants at the southern border.
Just this week, Trump tweeted a threat to add additional fees or taxes on remittances sent to Guatemala.
It goes without saying that a permissionless form of digital cash like Bitcoin could be a useful option for those who wish to avoid any potential limitations placed on their ability to send money back home to their families.
3. Push Against End-to-End Encryption
The push against end-to-end encryption from various government agencies this year may be the most egregious example of why Trump is good for the bitcoin price.
Over the past month, members of the White House staff, U.S. Attorney General William Barr, and FBI Director Christopher Wray have all had negative things to say about the availability of apps that include end-to-end encryption. Some of these parties have gone as far as to recommend an outright ban on the use of end-to-end encryption.
Of course, these are basically the same arguments that were made during the Crypto Wars of the 90s, and legal precedent could make it difficult for anything to change on this front. That same legal precedent is behind Abra CEO Bill Barhydt’s theory as to why it would be extremely difficult for the United States to implement any sort of ban on Bitcoin.
The difficulties associated with the successful implementation of a Bitcoin ban have also led to one economist to claim that the best way for governments to kill Bitcoin may be to compete with the digital asset.
These anti-encryption statements from government officials are another indication of how both governments and the large tech giants effectively want access to what everyone is doing at all hours of the day. In that sort of dystopian nightmare, Bitcoin is the only option for true financial sovereignty.
Some of Trump’s actions and policies may lead to direct increases in the utility of Bitcoin, while others simply bring more attention to the existence of this new, apolitical money. Either way, it’s clear that Trump’s presidency has been an educational experience for the Average Joe who may not have understood why Bitcoin is still around after ten years.
Kyle Torpey – Read more on forbes.com