August 10, 2021 - 11:36am
The anti-crypto law in President Biden’s latest $1.2 trillion infrastructure bill is causing panic in the community. Despite two pro-Bitcoin senators, Cynthia Lummis (R-WY) and Pat Toomey (R-PA), filing an amendment in protest, the bill, which forces key crypto participants to report their revenues, is set to pass through Congress, 68–29 votes in favour.
Crypto advocates, figureheads, and promoters have entered full-blown panic mode. The influencers have come out in force, including Anthony “Pomp” Pompliano and Dan Held. Jack Dorsey, CEO of Square — which holds roughly $50 million in Bitcoin, vented his frustrations while trying to think of a resolution. Even Senator Ted Cruz (R-T) unveiled a hitherto hidden passion for pseudonymous currencies: “Crypto got screwed tonight”, he said on Twitter.
The mainstream and crypto press have had a field day covering the story. But not a single outlet seems to have noticed how the entire Bitcoin publicity machine — the crypto influencers, crypto elites, Silicon Valley, and “moonboys”— have gone from calling every negative catalyst “FUD” propaganda (fear, uncertainty and doubt) to entering panic mode at the first hint of genuine regulation.
J.D. Vance, the Ohio candidate for the U.S Senate, gave the most bizarre response to the bill, claiming “Ohioans are the losers”. But barely anyone owns Bitcoin in his state or any other in America. As a recent Smerconish survey shows, only 14% of people would ever consider investing in it. Vance also said that Big Tech will benefit the most from the regulation, which would be surprising, considering that Peter Thiel, possibly the most Bitcoin-bullish Silicon Valley figure, is backing his Senate run.
This conflict of interest sums up today’s Bitcoin ecosystem in a nutshell: those who’ve made fortunes or a name for themselves through promoting crypto now have a huge financial interest to defend. Bitcoin began life as a way to subvert the system, to create a truly decentralised payment process, censorship-proof and detached from any legacy power structure and its influence. If that was still true, Vance and others would have dismissed the bill as a nothing-burger, a reasonable step on the movement’s journey to reaching the masses.
Instead, they came out against it and in the process revealed their true colours. They’ve realised that a truly decentralised currency is a fantasy, but “decentralisation” has become rhetorical cover for continuing to pump Bitcoin’s price and their own wealth.
The crypto elite are protecting their gains by trying to preserve the unregulated, Wild West atmosphere of the movement. It’s why they’re so desperate for this bill not to pass because it exposes the myth that Bitcoin is detached from the legacy world. They know that forcing miners, validators, and software developers to report taxable income will destroy the unaccountable properties of Bitcoin — the main reason it still has value — once and for all.
Greg Barker is an independent journalist and quant, who also writes under the name Concoda. You can find him on Substack and Twitter at @concodanomics.
Join the discussion
Join like minded readers that support our journalism by becoming a paid subscriber
To join the discussion in the comments, become a paid subscriber.
Join like minded readers that support our journalism, read unlimited articles and enjoy other subscriber-only benefits.
Subscribe“They’ve realised that a truly decentralised currency is a fantasy …”
Can the author deign to elaborate what this proposition means? First start with the meanings of “decentralisation” and then explain how “regulation” undermines decentralisation.
I will be glad to see Bit Coin gone. It has NO intrinsic value, it is mere speculation. As a medium of exchange it is slow and costly for transactions, and as the price is wildly unstable not good for preserving wealth unless you believe MicroStrategy CEO Michael Saylor, the biggest bit coin pusher of all. He says it will be $4 Trillion, and it has no where to go but up – and endlessly is on Youtube promoting it with crazy claims. Bitcoin shows the irrationality of the current markets.
Here is the deal as I get it. The majority of Bitcoin is held by the ‘Whales’ – massive holdings they got wile it was a few dollars. They do what is called Hoddling – holding it, and claim to be doing so because it has 1000X yet to rise in value.
The thing is they cannot sell out as if they did the panic would set in as it seems to be like The Tulip Mania scam of the 1600s, or Ponzie, or the rest of them, if a run begins it will go to the bottom. There are over 12,000 Digital Currencies – virtually all worth zero, because they are not backed by anything. Fiat Currency (paper money) is backed by the Nation which prints it – but Bitcoin is backed by nothing but faith – and that can pop….
What they do is borrow against it, which will be something else if it goes South
But till you understand USDT, you cannot understand Bit Coin
“The live Tether price today is $1.00 USD with a 24-hour trading volume of $47,658,724,093 USD. Tether is down 0.02% in the last 24 hours. The current CoinMarketCap ranking is #3, with a live market cap of $62,561,350,128 USD. It has a circulating supply of 62,525,151,502 USDT coins and the max. supply is not available.”
Do a search on Tether…. each coin is supposed to have one $ deposited in a Cayman Island bank to back it, but there is no evidence this deposit exists, no audit…that is a lot of Billion.
So almost all bit coin is bought with Tether, and when sold is sold as tether, and this makes me wonder about ‘Pump and Dump’ where invented tether is being used to buy Bitcoin to run up the price – also if tether goes bad, that is what you get when selling bitcoin. It all is way to crazy for me..
FOMO, fear of missing out sometimes had me almost buy some – and I still feel FOMO, but I believe more in the other chance, of it crashing, as there just is nothing backing it, it is speculation, not investing. I am wrong as much as right.
PS the reason I wrote all this is because I fallow it, and it is one of the great many things I worry will wreck the global economy. Bitcoin has about a Trillion $ market Cap – Gold has about 10 Trillion $ so it is already 1/10 of Gold! And till 1971 gold was what backed the world’s currencies. That is huge, that bitcoin is so high, because if it does panic and collapse, and the Trillion basically goes to money heaven, it could topple a great many things – I assume bit coin is heavily leveraged, and so it could be the domino which sets off the chain. This is big money on a crazy house of cards foundation….
It is wild stuff… Then digital Yuan, the EUCB is getting the digital Euro soon, the Digital $ will fallow (CBDC) – and they will utterly change the global paradigm of how money works, how it is created, and how it is debt… It is BIG. And scary.
….you are a puzzle Sanford. Clearly, digital fiat currencies are worse than paper fiat ones. Going digital makes it easier for govts to control what citizens do with their money, in addition to the theft of wealth which govts achieve through the never-ending expansion of the money supply. So you are right to say that central banks issuing digitals, is a big and scary development. But cryptos are the only asset class on the horizon, ( the first new asset class since the 1600’s) which has any prospect whatsoever, of holding govts to account, by citizens transferring their wealth into crypto coins, and practically out of reach of confiscation. It seems to me you’re distracted by the start-up volatility of cryptos, as they grow into the broader public consciousness, and you’re missing the long term beneficial impact (social and economic) of an asset class outside of substantive govt or private sector control.
If its recognised as taxable then in some way crypto has won and will be “as fiat”. The taxes presumably paid in dollars based on BTC gains or BTC as income at the U$D/BTC rate at the time of the transaction. Baddies, meanwhile, will hide their wallets well and carry on in parralel doing exactly what they do now. Can’t say it bothers me a lot. Banks have been too close to Govts for years. Breaking capital away from govt will IMO allow true investment in often young and urban resources who would otherwise be cut out of the loop. They in turn will pay tax and have a more tangeable stake in society. Like many i had a few bitcoins when they were £200 and spent it, leaving about £2.20/0.01BTC balance, so was pretty chuffed april 2021 when 0.01 was £550. You can buy car parts in US and China with it. Our kids and their peers love BTC, ethereum, doge etc and, brilliantly, “USD Coin” who’s price has fluctuated between $.99 and $1.01 over the last 3 years.
You have to pay taxes on gambling winnings, which does not make a Lotto card money.