Bitcoin may have experienced the perfect storm for success, but action by the United States government may remain a threat.
Ryan Selkis, co-founder of data and research company Messari, recently released his 2021 crypto sector thesis, examining the state of the industry as well as forecasting what lies ahead. Selkis explains in this report that the U.S. government is one remaining adversary he feels BTC must win over.
“The ‘final boss’ to beat is the state,” Selkis wrote in his report, released on Tuesday. “For the U.S., bitcoin presents a tool to undermine international sanctions, and 80% of mining capacity now sits behind enemy lines in China, Russia, and Iran,” he noted. “Will a Biden administration like BTC? TBD.”
Bitcoin has trudged through its fair share of governmental adversity in the 12 years since its inception. With its status as a commodity, Bitcoin’s reputation is somewhat solidified. Concerns of a U.S. government ban have still arisen, but the Office of the Comptroller of the Currency’s acting leader, Brian Brooks, recently explained that his unit views Bitcoin favorably.
Still, the government changed its tune on gold in 1933, confiscating the precious metal from citizens en masse. Even though the U.S. government may find it difficult to confiscate Bitcoin functionally, banning the asset could still hurt its price and associated cash on-ramps.
On the bullish side of the table, Selkis gave a nod to Bitcoin’s resilience. “Bitcoin is an unseizable form of private money that’s proven very hard to kill,” he wrote. “It’s outperformed every major asset class over every relevant time period in its history, and it’s got perfect macro tailwinds and momentum,” he said, adding:
“It’s getting ‘safe’ to purchase from a legal and reputational standpoint as a professional money manager, and its supply will inflate less than the Fed’s target rate no matter what happens next year. When you look at BTC vs. gold, and its growth vs. global M1, M2, and central-bank balance sheets, it’s a compelling investment.”
Bitcoin’s price has flourished in 2020 amid massive U.S. money printing efforts and economic uncertainties. A number of large mainstream players, such as Microstrategy and Paul Tudor Jones, have allocated large sums of money to Bitcoin this year as well, padding the asset’s credibility.
Bitcoin topped near $20,000 in December 2017, only to fall below $5,000 multiple times in the years following. This year, Bitcoin broke its previous all-time high, showing a refusal to die, something big mainstream players like, according to Selkis’ interview with Anthony Pompliano, published on Tuesday.
“Smart money investors knew about Bitcoin back in 2017,” Selkis said, subsequently explaining Bitcoin’s mainstream attention back then, as well as its boom, bust, and boom again over the past three years. “I think a lot of them have appreciation for things that don’t die,” he explained.
Mainstream giants, such as Amazon and eBay, have also shown great resilience through the years, rising from the ashes after the dot-com bubble popped in the early 2000s.