Bitcoin has exploited a perfect storm for its success, but the actions of the U.S. government remain a potential threat
Ryan Selkis, co-founder of the Messari data and research company, recently published his thesis on the crypto sector for 2021, examining the situation and predicting what the future holds. In this report, Selkis explains that the US government is the last remaining opponent for BTC.
„The ‚final boss‘ to defeat is the state,“ Selkis wrote in the report, published Tuesday. „For the US, Bitcoin presents a tool that can undermine international sanctions, and currently 80% of its mining capacity lies behind enemy lines in China, Russia and Iran. […] Will the Biden administration appreciate BTC? We will see.“
In the 12 years since its creation, Bitcoin has faced its fair share of government adversity. Once it has achieved commodity status, its reputation seems to have been relatively well established. Although there is no shortage of fears about a ban imposed by the U.S. government, the incumbent leader of the Office of the Comptroller of the Currency, Brian Brooks, recently explained that his department has a positive opinion on Bitcoin.
Despite this, the government is known to have changed its mind about gold in 1933, confiscating the precious metal en masse from citizens. Although the United States may find it difficult to confiscate Bitcoin functionally, banning the use of the asset could still damage its price and its on-ramp fiat.
Turning to the bullish perspective, Selkis has highlighted the resilience of the crypto asset.
„Bitcoin is a form of private money that is impossible to confiscate, which has proven to be hard to die. It has outperformed every major asset class in any relevant period of time in its history, and has a perfect stern wind and macro momentum.
From a legal and reputational point of view, buying it is becoming ’safe‘ for professional asset managers, and its offer will inflate less than the rate set by the Fed regardless of what happens next year. Looking at a comparison between BTC and gold, and its growth compared to M1, M2 and central bank balance sheets globally, it is a convincing investment“.
In 2020, Bitcoin’s price rose sharply in the context of record money printing in the US and economic uncertainty. This year, major mainstream players, such as MicroStrategy and Paul Tudor Jones, have allocated large sums of money to Bitcoin, giving the asset additional credibility.
In December 2017, Bitcoin peaked at close to $20,000, and fell below $5,000 several times in the following years. This year Bitcoin has surpassed its previous all-time high, proving its resilience: a feature appreciated by big mainstream operators, as Selkis pointed out in an interview with Anthony Pompliano on Tuesday.
„Smart money investors knew about Bitcoin in 2017,“ said Selkis, highlighting the mainstream focus on Bitcoin at that time, as well as the boom-bust cycle repeated several times over the past three years. „I think a lot of people appreciate things that are hard to die for,“ he explained.
Even mainstream giants like Amazon and eBay have shown great resilience over the years, rising from the ashes of the dot-com bubble that burst in the early 2000s.