A couple of articles I read earlier today suggested there was a link between Biden nominating 'crypto hating' Janet Yellen for Treasury Secretary and the dip in the Bitcoin Price.
- Cointelegraph -Bitcoin and altcoins correct after Yellen’s ‘illicit financing’ critique.
Coindesk - Bitcoin sell off on Bearish Sentiment, Yellen Worries.
- And the dip in BTC is also also cited in this Business insider article.
Admittedly there does seem to be some correlation:
But is the appointment of Yellen necessarily all bad news?
Not necessarily according to this recent Coindesk Podcast, with Nathaniel Whittemore which is well worth a listen (from 5 minutes in).
TBH the podcast is more of a review of the 'crypto narrative' in which new investors (this time round the institutional investors) battle with three 'FUD' narratives:
- The Tether scam narrative - that Tether isn't really backed by real dollars, can just be printed and printed and used to manipulate the BTC price, and there may be a risk of not being able to get your money back out.
- The 'environmental impact' problem of BTC, set against the larger backdrop of the likelihood of Biden introducing much stricter environmental legislation on business.
- 'Yellen's FUD - that crypto is 'mainly' used to finance terrorism.
Whittemore dismisses each of the above as being demonstratively false, especially the later, calling it the oldest narrative, emerging in the early days of BTC and the silk road, but one which is long since in the past.
He cites (the by now probably well read) Chainalysis Report on criminal activity and crypto - that points out that criminal crypto transactions are falling representing only 0.3% of all transactions today. That's only around $10 billion worth of transactions per annum.
Compare this to other estimates of the FIAT criminal economy - measured in trillions of dollars, and it gives you an idea of how insignificant the role of crypto and BTC is in crime, compared to the dollar, and cash.
And no one ever argued that 'cash' or 'the dollar' are responsible for crime, did they?
He further suggests that the best riposte to this old and dated Yellen narrative is just to point to the facts of how wrong she is, and that her statements are possibly a sign that her knowledge of crypto is very limited and dated, and that it's not even really on her radar.
The macro picture may be good for Crypto
While there is possible a link between her stated dislike of crypto and its recent decline in price, it might not be all that bad....
Yellen is a huge fan of a MASSIVE $1.9 billion stimulus package, which will put billions of dollars straight into the hands of ordinary Americans, which could prove very good for both the economy in the short term and Bitcoin in the long term as the Fed soaks up more debt.
I think there's really something in pushing BTC and crypto more generally as technologies which can work for the people and allow them more choice and economic freedom, and NOT at the expense of fostering more criminal activity, which is patently NOT the case!
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