For The Crypto Crowd, It’s Soul Searching Time
China is all set to "crack down on Bitcoin mining and trading behavior, and resolutely prevent the transmission of individual risks to the social field."
That's according to a statement from the State Council, released following a meeting of the Financial Stability and Development Committee on Friday. The proceedings were chaired by Liu He. (You remember Liu, right? He's a somebody.)
Bitcoin slumped on the headlines. It was the second time in a week that a pronouncement from Beijing contribute
Is it just me, or is that filthy old fiat currency backed by the full faith and credit of the United States looking better and better?
I think precious metals may benefit. Which would give the old hard money/inflation crowd all the proof they need.
Frying pan and fire.
Well anyone who thinks that sovereign countries are going to sit idly by while Bitcoin takes away their currency sovereignty, is probably smoking something more powerful than weed
I tend to agree with these sentiments regarding regulation. However, as long as people are free to choose crypto, the upside remains high. in the case of btc, the real tipping point to price appreciation wont be when ppl can suddenly spend their btc (easily like cash) but instead when they can easily demand to be paid in btc. if only a few of the worlds high earning entertainers, artists, and techies start requesting payment in btc (at whatever price they value their labor) then there will be sufficient demand on the small float of coin to massively drive price. is that a thesis? I dunno. But I do know that if airbnb allows me to set a price in btc for my rental, I would happily set such a price and accrue said btc even if I cannot pay business expenses with it. this future may not come for btc, but it will for some other crypto.
If Jack Ma wanted to take his wealth out of China in the middle of the night (assuming he could figure out a way to physically move his body out of China) and relocate to Malta, crypto would be the easiest way to do that.
No surprise with China’s actions- on many fronts.
During the devaluation scare in China three or so years ago, large buying out of China did appear. But if they crack down, what locally domiciled banker would want to risk approving the wire transfer to the BTC exchange? Unless he/she was on the same plane out that night.
China has the “Great Firewall” and one would be silly to think that one’s crypto transfer will go undetected by deep packet inspection.
The Chinese govt knows, or can know if they wish, the location of every mining computer operating in China. Anything going through the internet or using a substnatial amount of power can be located.
The US is perfectly capable of the same intelligence gathering, by the way (NSA, etc). Given that crypto currency enables ransomware and ransomware can be characterized as a national security threat, it would not be too far fetched to imagine that preparations for doing to are not in draft somewhere.
Decentralized finance is an interesting concept. Having done a little more reading on the subject, it has opened my mind. That said, what I am really saying is blockchain is an interesting concept to build upon. The coins not so much. My vague understanding is that etherium has a lot of developers for applications related to the coin as part of an ecosystem. But like many early innovations a lot of capital is going to be lost before a robust model develops. Sort of like the internet circa 2000. In the meantime if you are trading coins there is no question that you are entering a casino, and the house takes a large vig.
You all talk about China as if they are the only ones who would really crack down on this stuff. As far as I know the Feds can still do a warrant-less search of your house when you trip off to work. Under the Patriot Act they can get any financial info on you they want with little or no probable cause. I asked one of my banker clients one time how many Patriot Act requests they filled in an average week. They had 60,000+ customers and had to give the Feds full files on 200 of those customers in an average week. The Patriot Act is designed to root out terrorists and one excuse for clamping down on or outright prohibiting crypto is to block terrorism. We don’t need the Fed to stop crypto when we have the NSA, the Patriot Act, and the IRS for starters.
I agree, the US has some information about crypto trading. Coinbase sends 1099s to the IRS after all. However, I’ll bet many crypto traders and users aren’t reporting gains and losses and payment or receipt, and some probably have little chance of getting caught right not if they use crypto exchanges that are beyond US jurisdiction. That’s where NSA’s capabilities would be handy.
However, governments – US, China, or otherwise – may decide that even disregarding the tax evasion aspects, crypto poses too great a threat to other governmental interests. Actually, I suspect many governments will.