"There's No Capacity to Kill Bitcoin."
Our Top Ten Moments from Bitcoin's Wild Week on Capitol Hill
There's never a dull moment in crypto, but some weeks are more consequential than others. Last week was one of them.
Here's what you missed:
1) It all started when Federal Reserve Chairman Jerome Powell went to Capitol Hill for a customary hearing on US monetary policy. Things got interesting when Idaho Senator Mike Crapo asked Powell about Facebook's proposed Libra token, which led to a follow-up question around the threat that cryptocurrencies might pose to the US dollar:
2) But it didn't stop there. Later that night, the President weighed in on Twitter:
I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity....
— Donald J. Trump (@realDonaldTrump) July 12, 2019
Some Bitcoin advocates questioned whether this actually reflected Trump's personal view or rather messaging crafted by his advisers within the Treasury Department. Either way, it's difficult not to view the first-ever comments on cryptocurrencies by a sitting U.S. president as anything but historic and a sign that digital assets are here to stay.
3) The strange series of events continued a few days later when Secretary of the Treasury Steve Mnuchin called a last-minute press conference around the vague subject of "cryptocurrencies" — just days before scheduled Congressional hearings around the same topic.
“This is indeed a national security issue,” Sec. Mnuchin said on the need for more regulation in the crypto space. “We will not allow digital asset service providers to operate in the shadows.” https://t.co/03CEzStDZE pic.twitter.com/zykiOLkm96
— Bloomberg Crypto (@crypto) July 15, 2019
Yet his negative tone and nuanced message belied a more important takeaway for Bitcoin service providers:
US Secretary of the Treasury @stevenmnuchin1 just confirmed that "cryptocurrencies" are a growing industry that must comply with existing US regulation for financial services companies
massive validation - play by the rules as a bitcoin company, and all is good
— Meltem Demirors (@Melt_Dem) July 15, 2019
4) On Tuesday, Facebook's David Marcus ventured to the Hart Senate Office Building for his first hearing, which was noticeably light on Bitcoin. The few mentions it did receive reflected less concern on behalf of Senators when compared with their comments regarding Facebook's proposed Libra. (Full hearing)
Meanwhile, CoinShares Chief Strategy Officer Meltem Demirors sat down with Yahoo! Finance to preview her testimony for the House Financial Services Committee scheduled the next day:
Highlight: As Congress grills $FB on its Libra project, “it’s very important to not throw out the proverbial baby out with the bathwater,” says CoinShares Chief Strategy Officer @melt_dem. Also explains why Switzerland has “become a haven for many cryptocurrency companies.” pic.twitter.com/JV9Ed2FnsY
— Yahoo Finance (@YahooFinance) July 16, 2019
5) If Tuesday was light on Bitcoin, Wednesday was anything but — starting with this rather surprising sound bite Wednesday morning from Rep. Patrick McHenry who noted that there's "no capacity to kill bitcoin."
6) Later that morning, Marcus' marathon of hearings continued in the Rayburn House Office Building with over four hours of testimony in front of the House Financial Services Committee. Following his appearance, the Committee convened a second panel of subject matter experts to testify, which included Meltem. (Watch both panels from the Committee hearing in full here.)
Her message to the policymakers was clear - Bitcoin and Libra are fundamentally different, and should be treated different accordingly:
7) Follow-up Q&A from Representatives demonstrated a surprising knowledge of Bitcoin and refreshing level of open-mindedness when it came to supporting innovation:
8) But perhaps the most memorable exchange of the day came from Ohio Rep. Warren Davidson when he asked Meltem if she was familiar with the term "shitcoin" and could explain the differences between these types of digital assets and Bitcoin:
So now it's official: "shitcoin" is in the Congressional record, which also means it's now legal to play in Scrabble. It might even suggest something else if you ask Ryan Radloff:
We clearly have #bitcoin maximalists in Congress #shitcoin
— Ryan Radloff 👩🚀 (@RyanRadloff) July 18, 2019
Did you see this coming back in December? We certainly didn't - at least not this quickly.
9) Upon the hearing's completion, Meltem sat down with CNBC and Bloomberg to discuss her thoughts on the hearing and events from the past week:
10) Quite clearly, the conversation around Bitcoin and crypto assets is changing in a significant way.
The market has materially matured since the last hype cycle, and signs are starting to emerge that Bitcoin acceptance will be more broad and mainstream whenever the next cycle occurs. At the same time, the threats and obstacles to Bitcoin adoption will likely take new form as well.
Whatever happens, we tend to agree with Rep. McHenry:
“Digital currencies exist, blockchain technology is real, and Facebook’s entry in this new world is just confirmation, albeit at scale. The world that Satoshi Nakamoto, author of the Bitcoin whitepaper envisioned, and others are building, is an unstoppable force. We should not attempt to deter this innovation, and governments cannot stop this innovation."
This update is for general informational and educational purposes only and is not a financial promotion of any kind. The information provided is not intended to be a recommendation or investment advice. Any potential investor in digital assets is strongly recommended to seek independent financial advice upon the merits of such investment in the context of their unique circumstances.
Sign up for our monthly newsletterSubscribe
Our latest insights & research. Never spam.