On July 11th, the president of the United States went on a Twitter tirade speaking about his distaste for cryptocurrency, bitcoin, and Facebook’s Libra. Following this announcement, bitcoin prices remained unaffected. However, this past weekend has seen a downtrend with bitcoin even trading below $10,000.
Crypto veteran analyst and trader Alex Kruger addressed the possibility of Trump banning bitcoin in a series of tweets on July 15th. Alex noted that Trump could issue an executive order to ban bitcoin and a price crash would emanate if this materialized. He went on to say that Trump has already issued an executive order to ban Venezuela’s Petro. He tweeted, ”Trump could issue an executive order banning US persons from dealing in Bitcoin. He has already done so with the Petro.”
Alex also noted that Trump would not be the first president to issue executive orders to ban a financial asset. In 1933, President Roosevelt banned hoarding of gold via the authority of Trading with the Enemy Act of 1917. This Act gives the US president the power to take extreme measures against any financial entity or asset that poses a threat to the US economy.
3 Compelling Reasons That Would Push Trump To Impose A Bitcoin Ban
In his twitter thread, Alex elucidates 3 reasons that the president of the United States would present if he was to ban bitcoin. First, Alex notes that crypto poses a major threat to the US banking system. He stated, “Crypto represents a threat to the banking system, which has strong lobbying powers, as evident by the swift attempt to ban Libra.”
Secondly, he notes that crypto could weaken Washington’s power to impose economic sanctions, and cited that this is a key foreign policy competitive advantage. He adds that the president is solely responsible for foreign policy and questions whether he would issue a ban order as an act of foreign policy.
Finally, Kruger pointed out the cliché that crypto is used to facilitate criminal activities. In his aforementioned tweet, Trump echoed this sentiment that every crypto detractor always brings forward. Kruger opined that the US government could formulate new strict regulations to govern crypto even though the US dollar is also linked to illegal activities.
Trump would be tasked with convincing Congress that banning bitcoin would be great for the US economy. And even after this, Federal courts can constitutionally overturn an executive order by the president. However, Alex notes that US regulators can target fiat onramps.
He said, “For example, US regulators could arguably determine crypto assets are too volatile to be sold to retail (non-accredited) investors and deal a hefty blow to crypto exchanges.
The analyst posited that Trump could prohibit banks from servicing crypto exchanges or he could also put tough conditions that banks would have to meet before they service crypto exchanges. This would ultimately cripple cryptocurrency prices.
The Silver Lining
Despite noting earlier that a ban could cripple bitcoin prices, Alex Kruger concluded saying that a bitcoin ban would actually cause a price uptick. He said investors would buy the dips while he would be on the selling side of the trade. He remarked, “Sell the news, buy the blood. For every buyer, there is a seller.”