What is Trump's Bitcoin Tweet Change

Let's be clear: this is not the substance of Donald Trump's tweet that made his critique of Bitcoin and Libra so important last week.

Do not be surprised that this American president says "not a fan of highly volatile "crypto-currencies" "based on thin tunes" that "facilitate illegal behavior"Or that he prefers by far a Currency "reliable and reliable" "called the US dollar!"

(Anyone who thought Trump to be a "stunned" libertarian advocate for censorship-resistant money had an ill-informed perspective on a man whose government is made up of former Wall Street leaders, who opposes free trade and a draconian approach to a variety of civil rights and social freedoms)

What matters is the very fact that a president-in-office has mentioned cryptocurrencies. In fact, from a price point of view, Trump's disparaging remarks are globally positive for Bitcoin. Friday night, the post-tweet price action reflected that.

More importantly, the tweet marks a symbolic step in the gradual but ever-increasing presence that cryptocurrency occupies in public conversation around money and politics.

It is also the starting point of a titanic battle over the shape of our global monetary system.

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Why is the Trump service on Twitter positive for the Bitcoin price? Well, bitcoin must remain relevant to succeed, and it was, at the very least, a recognition of the relevance of power.

By simply giving him the time of day, Trump revealed that people belonging to the higher levels of the US power structure noticed the challenge that cryptocurrency technology posed to him.

It is also important to note that this tweet came shortly after Federal Reserve Chairman Jerome Powell, one of the President's favorite punch bags, described Bitcoin in his testimony before the Senate, not as a means of payment, but as "an alternative to gold … a value … speculative reserve of value. "

Powell did not say that he saw Bitcoin as gold as such; it's a reference to how most Bitcoin users are currently dealing with this problem and, in that sense, it's just stating a fact. Nevertheless, this gave some legitimacy to Bitcoin's claim to replace the digital age of this old stock of values.

And if we think of how gold was used in the days of fiat money – as protection against political risks inherent in national currencies – then this double hit could hardly be better for those who argue that bitcoin should play this role in the 21st century. .

Think about it: the most powerful central banker in the world has described bitcoin in these terms. Shortly after, a selfish politician occupying the most powerful government position in the world has shown why you want such protection.

Amplify the story

This is all in the context of last month's announcement of the Libra project, a Facebook-sponsored blockchain and cryptocurrency channel.

As was inevitable when a powerful and controversial society launched a radical new idea, the arrival of Libra greatly amplified what I like to call the "narrative economy" in which cryptocurrencies flourish.

With its potential global influence derived from Facebook's 2.7 billion users, Libra forces citizens – business executives, bankers and, most importantly, heads of government – to think and talk about crypto -monnaies. Mike Chapo, chair of the Senate Committee on Banking, Housing and Urban Affairs, asked Powell the question and this is the main focus of the Fed Chairman's response. And this is clearly what inspired Trump to turn to Twitter, as his three-tweet message included a line saying that Libra "would be of little value or reliability" and that one should look for a bank charter to be able to function.

Nor do we forget that this comes just before next week's hearings on Libya, convened by the House's Financial Services Committee, as well as its chair, Maxine Waters, who warned that Facebook could not be allowed to compete with the dollar.

The alignment between Trump and Waters on an issue is inherently historic. But it also alludes to the power struggle at stake. The conversation that is developing concerns the structure of our financial system and the dominance of the intermediaries who manage this system: banks deeply embedded in our system of government, money and money. power.

As custodians of the dominant fiduciary money system, banks – and, by extension, political leaders who determine how to regulate them – can make it more difficult to use decentralized crypto-currencies such as Bitcoin and private currencies backed by companies such as Libra. Trump 's tweet, with a high degree of specificity, looked suspicious if it had been written by a person with interests in the banking sector.

But putting a brake on this will not be easy for governments. Most crypto-currencies, bitcoin or Libra, are based on open source software. Can these governments ban the software? Technically yes, but how will they coordinate globally around this effort, how will they stop it?

As it stands, many central banks seem to be adopting the "if you can not beat them, join them" strategy. The China Daily newspaper reported this week that China is accelerating its plans to produce digital currency. That happened a week after Agustin Carstens, head of the Bank of International Settlements, told central banks to introduce digital currencies "earlier than we think." It was a remarkable reversal of someone who had told cryptocurrency coders to stop trying to create money "and rejected any value in the central bank's digital currencies.

Probably more important, at about the time of the announcement of the Libra last month, the governor of the Bank of England, Mark Carney, launched a bomb, saying that the BOE would provide funds to companies of technology, which seems to want to lead the development of the fintech in London at the time of Brexit. threatened the banking sector. This opening offers a huge opportunity for Libra and other stable countries to provide new "narrow banking" payment services.

In other words, things are on the verge of becoming confused, with corporate private currencies, decentralized crypto-currencies and government-managed digital currencies competing for primacy in the world of money. Thanks to Libra – but really, thanks to bitcoin before it – the narrative economy around monetary innovation is seriously magnified.

Communities of stories

As the noise level increases, more and more people will learn and explore alternatives to traditional currencies such as bitcoin. They will also be faced with the disruptive opportunities, risks and challenges that such a choice poses.

Essentially, a giant collective storytelling exercise was pushed to the next level. Stories have always led to the adoption of new ideas, building the connective emotional fabric on which social networks and communities form around. And this, in turn – the development of a community around a shared idea – is ultimately what underlies a currency.

Trump, which, with its 62 million followers on Twitter, undoubtedly has a higher broadcast power than any other news network, contributes to this collective storytelling exercise. Perhaps he is the character of the film, opposed to the crypto enthusiasts "HODLers" and "To the Moon", but even in this role, he directs the narrative – essentially fueling the resistance, encouraging his opponents to counter by counter-arguments and of course, memes.

Which brings us to the other factor that makes sure that Trump's tweet, more than any other statement from a government official, will prove to be critical to generating excitement for this topic: Twitter itself.

Twitter is not only the president's preferred means of communication to communicate with the public, it is also the most important segment of the narrative economy of crypto. If ever a community was ready to answer these three short messages, it was Crypto Twitter, which immediately reacted with its special mix of snark, humor and passion.

God knows where all this is going. But one thing is certain: the cryptocurrency carnival has become wilder.

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