Even non-meme coins, like Bitcoin and Ethereum, are extremely volatile. Their prices change wildly; for example, 1 bitcoin went from 100k to 80k euros in the span of four days (23rd to 27th of February). However this volatility is somewhat predictable, specially if you’re used to the international market:
[higher | lower] interest rate across economically relevant countries → it becomes [more | less] attractive to lend money instead of speculate it → [lower | higher] cryptocoin prices
anything making investments [riskier | safer] → the risk associated with cryptocoins is [exacerbated | mollified] → [lower | higher] prices
etc.
Because of that, most “market” around those cryptocoins is simply monetary speculation: buy it low, sell it high, profit.
What Trump is doing here is signalling for months “USA will buy a buttload of crypto”. Vulture capitalists are watching it closely, and slowly hoarding cryptocoins. Then when USA buys those coins, demand goes up, so price goes up. Then the same vulture capitalists will be able to resell those coins at a higher price, turning out a nice profit. And as they sell their coins, USA buys even more coins for the “reserve”, so the price stays roughly stable up to a certain point.
However here’s the catch: money speculation does not create value, it only moves value from one hand to another. The money associated with the vulture capitalists’ profit will come from USA’s government. That USA gathers from its property citizens, through taxes. Trump is effectively moving money from USA’s population into the vulture capitalists’ pockets.
I also predict that he’s setting up a ticking bomb to explode on the next government, because as soon as USA stops buying cryptocoins, their price will crash really bad, and make the crypto winter of 2018 to look like child’s play. I wouldn’t be surprised if bitcoin lost 90% of its current value, and went back to 10k euros per bitcoin. This means that USA’s government will have relinquished 90% of the money associated with that idiotic “reserve”, now sitting comfortably in the vultures’ coffers.
To make it worse, the tariffs are increasing inflation. Guess how inflation is typically controlled? By increasing interest rates. Odds are that the next government will do it.
By the way he did a trial run of all this shit with two memecoins, named after himself and his wife. …and did I mention his master Elon Musk is all into cryptocoins? Ooopsie.
I feel like you are giving him too much credit, this is simply to appeal to the libertarians who are starting to see his idea of small government is fascism. Any deeper play of driving the price would be to benefit his grifters and himself while the dollar craps out.
Maybe also Russia who would be expecting more sanctions and I’m sure have been also buying up.
I’ll explain what’s up.
Even non-meme coins, like Bitcoin and Ethereum, are extremely volatile. Their prices change wildly; for example, 1 bitcoin went from 100k to 80k euros in the span of four days (23rd to 27th of February). However this volatility is somewhat predictable, specially if you’re used to the international market:
Because of that, most “market” around those cryptocoins is simply monetary speculation: buy it low, sell it high, profit.
What Trump is doing here is signalling for months “USA will buy a buttload of crypto”. Vulture capitalists are watching it closely, and slowly hoarding cryptocoins. Then when USA buys those coins, demand goes up, so price goes up. Then the same vulture capitalists will be able to resell those coins at a higher price, turning out a nice profit. And as they sell their coins, USA buys even more coins for the “reserve”, so the price stays roughly stable up to a certain point.
And remember when I said that interest rate affects cryptocoin prices? “Trump says lower interest rates would go hand-in-hand with tariffs”. At least at the start of his plan, he needs to keep those taxes as low as possible, so the price goes up.
However here’s the catch: money speculation does not create value, it only moves value from one hand to another. The money associated with the vulture capitalists’ profit will come from USA’s government. That USA gathers from its
propertycitizens, through taxes. Trump is effectively moving money from USA’s population into the vulture capitalists’ pockets.I also predict that he’s setting up a ticking bomb to explode on the next government, because as soon as USA stops buying cryptocoins, their price will crash really bad, and make the crypto winter of 2018 to look like child’s play. I wouldn’t be surprised if bitcoin lost 90% of its current value, and went back to 10k euros per bitcoin. This means that USA’s government will have relinquished 90% of the money associated with that idiotic “reserve”, now sitting comfortably in the vultures’ coffers.
To make it worse, the tariffs are increasing inflation. Guess how inflation is typically controlled? By increasing interest rates. Odds are that the next government will do it.
By the way he did a trial run of all this shit with two memecoins, named after himself and his wife. …and did I mention his master Elon Musk is all into cryptocoins? Ooopsie.
I feel like you are giving him too much credit, this is simply to appeal to the libertarians who are starting to see his idea of small government is fascism. Any deeper play of driving the price would be to benefit his grifters and himself while the dollar craps out.
Maybe also Russia who would be expecting more sanctions and I’m sure have been also buying up.
I don’t think that he knows what he’s doing. Instead the people around him are all into crypto, and manipulating him so they can profit out of it.