Bitcoin fell below US $10 thousand before Hearing on Libra

Willmen Blanco
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Bitcoin fell below US $10 thousand before Hearing on Libra

The US President Donald Trump tweeted that he was not a fan of Bitcoin or other cryptocurrencies, since he does not consider them money and says that their value is highly volatile and based on air. He argues that unregulated crypto assets can contribute to unlawful behavior, including drug trafficking, among other illegal activities.

He also said that Facebook’s Libra, like other virtual currencies, would have little reputation or reliability. He explained that if Facebook and other companies want to become banks, they should seek a new Banking Charter and become subject to all the Banking Regulations, the same as other Banks, both National.

It was announced that on July 16th and 17th there would be a hearing in the United States Congress on the Facebook Libra. This report caused the price of Bitcoin to plummet below US $10 thousand. A few days before, Bitcoin was around US $13 thousand.

After Bitcoin’s Fall

Many wondered if they should sell their Bitcoin after that fall below US $10 thousand. It is worth noting that Bitcoin usually falls before a hearing in Congress. In 2018, Bitcoin dropped from US $6,820 to US $6,070 days before the Committee of Financial Services held a hearing on “crypto as a new form of money.”

Similarly, Bitcoin fell from US $12 thousand to US $6 thousand before the hearing of February 8th, 2018, where the Securities and Exchange Commission (SEC) chairman and the head of the Commodity Futures Trading Commission faced the Senate Banking Committee. However, as the hearing was positive for Bitcoin, it kept rising to US $11,700 until February 20th.

What is next for Bitcoin?

Many fear that the cryptocurrency version of Facebook is detrimental to the industry. For Instance, it is not exactly like Bitcoin, which is decentralized by nature. Instead, there are companies like PayPal, which can increase interest in them. On the other hand, it is feared that Facebook may influence countries.

John McAfee, known for his antivirus software, boldly predicted that Bitcoin is about to reach $ 1 million by 2020. He said that Bitcoin is hovering around US $10,500 and many people are already worried. He added that Bitcoin is increasing drastically and he is still positive about the US $1 million price by the end of 2020. Similarly, he believes that alternative currencies such as MTC and Apollo will increase ten times more.

Even bolder is the prediction that, in about 10 years, there will be no fiat anywhere in the world and that all economic transactions will be made through cryptocurrencies.

Anthony Pompliano, Co-founder of Morgan Creek Digital Assets, has a similar bullish prediction for Bitcoin, which says that Bitcoin is expected to reach US $100 by 2021.

Bitcoin will possibly continue rising to exceed the all-time high. In 2017, it was observed how Bitcoin rose in value mainly due to FOMO. Cryptocurrencies became mainstream and people started investing without even understanding the technology behind it. Scams and even useless tokens have become rampant. It only remains to hope that the market has really matured.

By Willmen Blanco

James Bullard, St. Loius Fed Chief, States that Cryptocurrencies are “Disruptive”

Andres Chavez
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James Bullard, St. Loius Fed Chief, States that Cryptocurrencies are “Disruptive”

Despite being widely adopted by online stores, business projects, governments, investors, bankers, and a wide community that grows by the day; the use of cryptocurrencies still raises a hot debate between those that defends them and those that criticize these assets because of their volatility, among other aspects.

James Bullard, who is currently the President of the Federal Reserve Bank of St. Louis and one of the most prominent economists in the planet, seems to take the side that criticizes cryptocurrencies, at least judging by his latest comments on the matter. He says that they can represent a disruptive force to the economy.

Cryptocurrencies and their Criminal Potential

Among Bullard’s concerns (some of them shared with his boss, Fed Chairman Jerome Powell) are that crypto assets can be threatening to the financial system for their potential to pave the way for criminal activity, as well as their lack of stability, evidenced in the price swings that have occurred in recent months.

According to Bullard, “cryptocurrencies may unwittingly be pushing in the wrong direction in trying to solve an important social problem, which is how best to facilitate market-based exchange.”

The economist states that he sees crypto assets as new entities that are entering the current, ongoing global currency competition. He observes that cryptocurrencies are not the first competition that fiat currencies have had in the past. He cited cigarettes as an example, saying that they “became a currency among POWs during World War II.”

A Pessimistic Outlook towards the Future

Bullard is not very optimistic about the future of cryptocurrencies despite their recent appearance, rise, and overall success as means to store value and the fact that he believes that “public and private currencies can compete and coexist.”

“Cryptocurrencies are creating drift toward a non-uniform currency in the U.S., a state of affairs that has existed historically but was disliked and eventually replaced.” Bullard has implied that he does not expect regular users and business will support crypto assets, despite the confidence around the industry that they will, inevitably, be adopted by the masses.

Bitcoin, the most prominent of all cryptocurrencies, is certainly a volatile asset, and there is no denying that its value is prone to skyrocket (which is what happened around the date that Facebook announced its Libra project) or to collapse (remember the mid-November hard fork of Bitcoin Cash?) at any minute depending on external circumstances.

It Will Always Be Volatile

Bullard, regarding that subject, believes that BTC will always be volatile and prone to change its value in a hurry. As a result, he thinks that payments are not a suitable use case. “Currencies have to be reliable and hold their value. This is probably why government backing has been important historically, combined with a stable monetary policy that promotes stability of the currency.”

Cryptocurrencies have found themselves in the mouths of congressmen, politicians, economists, and other prominent decision-makers since the announcement of Libra. Several countries in the world, most notably the United States, are still struggling to find a way to regulate these assets.

By Andres Chavez

Spanish-American Cryptocurrency Ecosystem Reacts to Trump’s Tweets

Willmen Blanco
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Spanish-American Cryptocurrency Ecosystem Reacts to Trump’s Tweets

Trump’s criticism of cryptocurrencies is applicable to the dollar, say Latin-American spokespeople. Others believe that Trump reflects uncertainty in the face of the loss of the monopoly on sending money.

US President Donald Trump provoked reactions among various players in the cryptocurrency industry, with the posting of a thread of critical tweets on this subject. Renowned spokespeople, as well as NGO leaders and exchange houses in the United States, talked about Trump’s comments. Some actors within the Spanish-American cryptocurrency ecosystem were asked to express their opinion about the North American leader’s tweets.

Through Twitter, one of his preferred means of expressing his opinions, the US president said that he was not a Bitcoin fan. In the first 240 characters, Trump indicated that he does not consider cryptocurrencies money, since they are volatile and their value is based on air. He also stated that unregulated digital assets facilitate unlawful behavior, such as drug trafficking.

According to Miguel Klagges, President of the NGO Bitcoin Chile, the US President’s comments are “laughable, considering that Mr. Trump’s criticism of cryptocurrencies is equally applicable to the dollar to a much greater extent.”

Klagges believes that the dollar may also be “based on air.” The activist said that is only people’s faith in the solvency of banks which maintains the traditional economic system, which is already questioned on many aspects. He also referred to the dollar as criminal organizations’ preferred currency and the most used in the black market worldwide.

Santiago Molins, Head of Technology and Innovation at Athena Bitcoin Argentina, dismissed President Trump’s criticism, considering that his approach to the subject was not as aggressive as it usually is in his critical tweets. He noted that Trump talks about possible uses of cryptocurrencies for illicit activities, forgetting to mention that the same applies to any currency.

In the technological expert’s opinion, the most relevant thing that President Trump said is shown at the end of the thread of tweets, where he states that “the dollar will always be the best currency.”

Molins believes that prosperity and success are not inherent properties in a dynamic world Hence, he considers that that statement cannot be taken seriously but as a mere expression of desire. He interprets this desire as arising from the uncertainty caused by having lost the monopoly of sending money worldwide.

Molins claims that the weakening of the monopoly, which traditionally allows money to be sent only “through banks, from banks that are from the USA,” is what is behind Trump’s tweets.

On his part, Sebastián Serrano, CEO of the exchange house Ripio, indicated as the most transcendental of Trump’s opinions on Twitter “that Bitcoin and cryptocurrencies are beginning to have a greater relevance.” In this regard, he stressed that increasingly important players, such as the president of the United States, have to express an opinion and talk about the subject.

Economist José Antonio Bravo has been a participant in the Bitcoin and cryptocurrency ecosystem in Spain since 2014. He stated that the fact that President Trump has posted those tweets is evidence “that they have reached a state of generalized knowledge, at least as an investment asset.”

Bravo argues that, undoubtedly, Bitcoin and cryptocurrencies are heading toward the following stages, which are taking hold as a store of value and then as a means of payment.

By Willmen Blanco

Ron Paul Defends Crypto: “I don’t Think the Dollar or any other Fiat Currency Will Last”

Andres Chavez
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Ron Paul Defends Crypto: “I don’t Think the Dollar or any other Fiat Currency Will Last”

Whilst digital assets and cryptocurrencies have been criticized by more conservative sectors ever since they appeared, especially most notably after they became mainstream, other communities and fields have embraced them as decentralized options to store, buy, sell, or trade value.

A prominent voice in the United States’ political landscape, Ron Paul, is one of those individuals that have not only welcomed the use of cryptocurrencies for every day applications, but also as worthy competitors for existing currencies.

A Well Known Figure in American Politics

Paul is a former Republican congressman which is a very well known figure in the American political life. He is now retired, but was a presidential candidate, author, and physician. He served as the U.S. Representative for Texas’s 22nd congressional district from 1976 to 1977 and from 1979 to 1985, as well as for Texas’s 14th congressional district from 1997 to 2013. On three separate occasions, he ran for the presidency.

Paul expressed his support towards cryptocurrencies, stating that he is in favor of them and the use of blockchain technology, as well. He defends the notion of “competing currencies,” and that’s why he likes digital assets. He offered the remarks through news network CNBC, in a “Squawk Alley” interview.

And, in the midst of a controversy in several locations about the proper regulation to control the use of these assets, Paul said that cryptos are a good idea, and that governments around the world should only intervene to regulate the space in order to prevent potential fraudulent activity.

“I’m for the Least Amount of Regulation”

According to the retired politician, “… I’m for the least amount of regulation. I don’t know what’s gonna happen to cryptocurrencies. I think it’s a great idea. And I only have one rule: no fraud … I think that the government has a role. And [if] somebody has a case that there is fraud, I think it should be investigated …  What I want to do is legalize the freedom of choice, absent blatant fraud.”

Paul offered several precise comparisons between crypto assets and gold, which is a more traditional way to hold value. The ex politician thinks that gold is similar to digital coins in the sense that they are both competing with yet another traditional type of money: fiat currencies.

According to the former congressman, who also served as a flight surgeon in the U.S. Air Force from 1963 to 1968 and worked as an obstetrician-gynecologist from the sixties to the eighties, “governments aren’t very tolerant of competition, and they’re not even tolerant with using the Constitution to compete with the fiat dollar. Because gold and silver, you can’t use it.”

History of a Pro-Crypto Stance

This is not the first time that Paul has sided towads cryptocurrencies and shared his bullish views. Five years ago, in 2014, he showed concern about the backing of Bitcoin and crypto in general, but since then, he has adopted a positive attitude towards these assets, to the point that he is even bearish on fiat currencies for the future.

“I just don’t think the dollar is going to last. I don’t think any fiat currency lasts forever. They all self-destruct. Right now, the world is engulfed with fiat currency; they’re all paper currencies. That’s one of the other reasons the dollar holds up: What are you competing against, the euro and the yen? The competition out there isn’t any good.”

By Andres Chavez

Crypto-exchanges in Canada Must Be Registered in the Financial Control System Before June 2020

Maria Rodríguez
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Crypto-exchanges in Canada Must Be Registered in the Financial Control System Before June 2020

The new regulatory measures could stop the operations of some crypto-exchanges companies in that country

According to a notice published on July 10th, the Canadian government will force crypto-exchanges companies operating in the country to be registered with the Financial Transactions and Reports Analysis Centre of Canada (FinTRAC), with a deadline of up to June 1st, 2020. This would give these companies a legality status in the country.

This requirement is due to a series of measures taken in conjunction with the amendment to the law against money laundering recently approved in Canada. This change will come into force next year.

In addition to registering in the country’s financial control system, cryptocurrency exchange companies must comply with the “Know Your Customer” policy, an alternative to the financial system that requires companies to have information about their customers. This also allows monitoring user’s financial movements.

In this way, crypto-exchanges companies that will operate in Canada must report to FINTRAC the transactions that may be suspicious of an economic crime. This means that those companies must have a detailed record of each client, as well as assign an officer in charge of compliance.

According to media reports in this sector, they indicate that compliance with these measures has been voluntary. Hence crypto-exchanges companies have adopted these measures in the same way. This is due to the constant search for the banking sector to collaborate actively with its companies and to be able to operate jointly.

The lawyer and partner of the Canadian business law firm Osler, Hoskin & Harcourt, Lori Stein, says that all financial institutions in Canada have been very concerned about what cryptocurrencies may mean for terrorist organizations that seek money laundering and accumulate methods for financing attacks.

In this sense, Stein hopes that now that these companies should be subject to the measures dictated by the financial control sector, now they can operate with more security and can achieve negotiations with banks.

“What we expect is that now that there is going to be a registration and compliance requirement, supervision by FinTRAC, banks and other financial entities are more open to providing services and dealing with virtual currency companies”, she said.

In spite of describing this measure as positive, Stein also affirmed that this measure can also be counterproductive, assuming that not all the crypto-exchanges companies that operate in the territory will be willing to adhere to these regulations of law. This would be a reason for these stop operating in Canada.

Stein’s latest statements may be the product of the assertions of Moe Adham, Founder and CEO at Bitaccess, who objected to the measure commenting that she expected to see exchange companies leaving the Canadian territory. “I hope to see a number of companies relocate outside Canada, as well as international companies that limit access to Canadians”, Adham commented.

These new regulatory policies in Canada could be a reason for many of the companies operating in the country to cease their operations and many others to stop taking the country into account as a territory to expand their business.

By María Rodríguez

Trump and the Growing Relevance of Bitcoin

Willmen Blanco
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Trump and the Growing Relevance of Bitcoin

Bitcoin and other cryptocurrencies have been gaining ground in worldwide economy for years. Pronouncements by the powerful, including Trump, are evidence of the rise of Bitcoin adoption.

Some believe that Bitcoin will be banned, that the dollar is irreplaceable, cryptocurrencies are not money, everything will collapse, and the “Bitcoin bubble” will explode soon, among other opinions.

Trump’s Twitter posts suggest that he has noticed the growing importance of Bitcoin and other cryptocurrencies in today’s society. He claims that crypto assets are not money and that their value is “highly volatile and based on thin air.” He also argues that “unregulated crypto assets” can promote drug trade and other illegal activities.

Since its birth in 2009, Bitcoin has gained ground in society, being certified as money at every step. It was first released to a limited number of e-mails as an experiment, but it was not long until it was compared to the dollar. Only 10 months later it was listed as New Liberty Standard at a rate of 1,309.03 bitcoins (BTC) per US dollar.

In May 2010, Bitcoin was first used to buy a physical good, by exchanging 10,000 BTC for a couple of Papa John’s pizzas, for a cost of US $25.

On July 11th of that same year, the first boost for Bitcoin adoption was given through an article published on the Slashdot site, where the release of version 0.3 of the software was announced. From then on, operations with bitcoins increased steadily, leading the cryptocurrency to its second and best known trade milestone in 2011: the birth of Silk Road.

This clandestine sales site is responsible for much of Bitcoin’s bad reputation regarding illegal activities. However, it should be noted that national fiduciary currencies, in cash form and the prevalence of the dollar and the euro, are more used in illegal activities. On Silk Road, traders offered their products and services in exchange for Bitcoin payments.

Thousands made exchanges on Silk Road, without using dollars (and without risking exchanges in person); therefore, it is not strange that on February 10th, 2011 the bitcoin quote reached parity with the dollar (1 BTC = US $1) in the failed and controversial exchange house Mt. Gox. This drastic price increase was due to Bitcoin’s use and adoption as money.

Eight years later, after hundreds of increasingly intense milestones, Bitcoin is more recognized as money despite Trump’s denial. Thousands of companies base their business in this currency and millions of people worldwide use it the same way as fiduciary money: deposit of value, means of exchange and unit of account.

Some people save in bitcoins instead of dollars because the former is revalued (despite its volatility in the interim) and the latter is devalued in the long term. Others send money to their families abroad using Bitcoin, instead of banking, PayPal or other methods based on the dollar because the speed of shipments with cryptocurrencies is higher and their costs are lower.

The fact that Trump talks about Bitcoin indicates that this crypto asset has reached higher levels of relevance. This implies that it is noticed and recognized by both the powerful and ordinary citizens, not to mention that they are worried about not being able to control it.

By Willmen Blanco

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