Is the Current Bitcoin Price Set to Attract Government Hostility?
Chief Development Officer
With the current Bitcoin price resting comfortably at $50,000, many people in the crypto market are curious to find out how world governments are going to react.
Bitcoin has always proven a strange and confusing subject for governments, with some of them even acting irrationally, so it is fair to assume that the current bull run will have regulatory bodies and government leaders discussing what (if anything) they should do about cryptocurrencies like Bitcoin.
Bitcoin's journey to $50,000
Firstly, let's look at how Bitcoin reached this gargantuan price. From December 13th, 2020 to February 7th, Bitcoin rose from $19,000 to $37,000, a 97% increase in a little over two months. The reasons for this are unclear, although most Bitcoin enthusiasts believed the asset was being undervalued for years, so the increase came as no surprise. Then, on February 8th, Elon Musk announced Tesla's purchase of BTC at $1.5 billion, shooting the price up to an all-time high of $58,000. As of writing this, the current BTC price is $50,187. Such a sizeable and quick increase is bound to bring the attention of governmental bodies and institutions.
Michael Burry on Bitcoin's future
Michael Burry, world-renowned investor, hedge fund manager, and one of the first people to notice the 2007 housing bubble, has commented on Bitcoin's future. He has warned traders that "legally violent, heartless centralized governments with #lifeblood interests in monopolies on currencies" will try to harm the progression of Bitcoin and other decentralized assets, adding that "in an inflationary crisis, governments will move to squash competitors in the currency arena."
Michael Burry's views are, to some extent, sound, and he is right to remind us that governments do not always have their people's best interests at heart. But, we believe that he is underestimating the dominance of Bitcoin and the technology that drives it. Governments may very well try to stop Bitcoin, either by trying to quash it through strict regulations or by trying to push its price down, but Bitcoin's strength is in its decentralization. Any attempts to thwart Bitcoin would likely be futile as governments often misunderstand the simple fact that it is practically impossible to shut Bitcoin down. Governments could outlaw it or try to push the current BTC price down, but that would not break Bitcoin. It would merely continue without government support. That might deter some traders, but not all.
Bitcoin will be fine
Crypto is too tough to be stopped by any government (or governments), and Bitcoin is omnipresent in the financial world nowadays. The current bitcoin price illustrates that perfectly. Michael Burry is not wrong to be worried about its future but to suggest that governments would succeed in ruining it is to be ignorant of the technology that underpins the project as a whole.
Chief Development Officer
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