Will the Government Kill Bitcoin? – The messenger

The internet is full of chatter and cryptocurrency questions – yes, again – after the price of Bitcoin recently broke $ 60,000 per coin. A serious question on many lips and screens is whether the federal government will allow this rival of the US dollar to continue or regulate it more strictly – or even ban it.

Opinions on Bitcoin and cryptocurrencies generally differ widely. Elon Musk – the richest man in the world – is cautiously optimistic. At a recent code conference, he stated that cryptocurrency is already too widespread for governments to destroy.

He may be right. But it is unwise to underestimate the destructive power of institutions whose power is threatened. If the government wants to shut down the crypto market, it may have the resources to do so. Regulators love to pick winners and losers.

Musk’s companies SpaceX and Tesla are examples of this. SpaceX faced imminent bankruptcy, and Goldman Sachs and other top lenders refused to provide loans to the blast-hit company. However, NASA has teamed up with SpaceX to alleviate the money problems.

Tesla was facing bankruptcy in 2008 and the Obama administration stepped in to save it. The price of electric vehicles exceeded their market value, so the government offered tax credits to make up the difference. Already now, with an enterprise value of over $ 1 trillion, the Biden government is creating lucrative subsidies under the current infrastructure package that will continue to fund Musk’s overflowing piggy bank.

These two examples illustrate how government has the power to support companies, people, and ideas that it likes. Conversely, it can destroy those who don’t. Bitcoin competes with a core government function; that brings it to dangerous ground.

Governments can come to crypto, and some have already. China is already cracking down on digital coins. Last month, it banned its citizens from holding, trading or mining coins, which crashed the entire market. The US doesn’t seem to be doing the same right now. However, it has sent some worrying signals that current and potential Bitcoin owners should keep in mind.

Earlier this year, the FBI announced that it had recovered over $ 2 million worth of Bitcoin from the hackers responsible for breaching the Colonial Pipeline. Most thought it impossible for technical reasons, but the Justice Department’s report on the incident makes it clear that “there is no place out of the reach of the FBI”.

Treasury Secretary Janet Yellen has now turned out to be a crypto skeptic. The Security and Exchange Commission is considering increasing regulations for digital currencies. Some decision-makers in Washington have even opened up the possibility of creating what is known as a “fedcoin” – the government’s cryptocurrency.

Whether or not the government will enter the crypto market is unclear; What is clear is that Musk is shortsighted when he says that it cannot fix the Bitcoin bug if it ever chooses to. It can sustain it just as easily as its businesses or shatter it as it did its competitors.

That’s not to say that cryptocurrency isn’t a good short-term or long-term investment option. Every investment comes with risk, and when it comes to Bitcoin, possible federal interference is one of those risks – even if the richest man in the world doesn’t realize the severity of that risk.

Elijah Henry is a freelance writer and a veteran in the United States Army. He wrote this for InsideSources.com.

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