Will the government kill Bitcoin? – InsideSources

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

Opinions on Bitcoin and cryptocurrencies in general vary widely. Elon Musk, the richest man in the world, is cautiously optimistic. At a recent code conference, he said cryptocurrency was already too prevalent for governments to destroy.

He might 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 companies SpaceX and Tesla are an example. SpaceX faced impending bankruptcy, and Goldman Sachs and other leading lenders have refused to grant loans to the company affected by the explosion. However, NASA has partnered up with SpaceX, easing money concerns.

Tesla went bankrupt in 2008, and the Obama administration stepped in to bail it out. The price of electric vehicles exceeded their market value, so the government offered tax credits to make up the difference. Even now, with the company valued at over $ 1,000 billion, the Biden administration is creating lucrative grants as part of the current infrastructure that will further fund Musk’s teeming piggy bank.

These two examples show just how powerful the government is to support the businesses, people and ideas it loves. Conversely, it can destroy those it does not. Bitcoin competes with an essential function of government; that puts him on dangerous ground.

Governments can go after crypto, and some have done it before – China is already going after digital coins. Last month it banned its citizens from holding, trading or mining coins, causing the entire market to collapse. The United States currently seems unlikely to do the same. However, it has sent worrying signals that current and potential Bitcoin owners should keep in mind.

Earlier this year, the FBI revealed that it had recovered more than $ 2 million in Bitcoin from the hackers responsible for the colonial pipeline breach. Most thought it was technically impossible, but the Justice Department’s report on the incident made it clear that “there is no place beyond the reach of the FBI.”

Now Treasury Secretary Janet Yellen has become a crypto-skeptic. The Security and Exchange Commission plans to tighten regulations on digital currencies. Some Washington policymakers have even raised the possibility of creating a so-called “Fedcoin”, the government’s own cryptocurrency.

Whether or not the government will enter the crypto market is unclear; what is clear is that Musk is myopic saying he cannot crush the Bitcoin bug if he wants to. He can back it up as easily as it did for its businesses, or crush it as it maybe did for its competitors.

This is not to say that cryptocurrency is not a good short 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 seriousness of that risk.

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