Bitcoin slumped in another large weekend move after US President Donald Trump’s criticism of cryptocurrencies late last week put the focus back on this year’s jump in prices.
The largest cryptocurrency tumbled 12% since Friday to trade at $10,428.23 as of 7:30 a.m. in Hong Kong. Other coins also retreated: Ethereum dropped 15% and Litecoin fell 14%.
Bitcoin initially climbed 6.8% on Friday after Trump’s comments, but has since more than erased the gains. Trump wrote on Twitter Thursday that he is “not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air," adding that “Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity." He also criticized Facebook Inc.’s plans for the Libra digital currency.
Bitcoin “continues to trade lower as comments from President Trump put downward pressure on the cryptocurrency," said Alfonso Esparza, senior market analyst at Oanda Corp. in Toronto. Drawing Trump’s ire does mean “it could fall further to $8,000, giving back all the gains made in June."
Trump made three unusually thoughtful and concise points. One: Bitcoin and other cryptocurrencies are great for criminals and speculators, and bad for everyone else. Two: Facebook Inc.’s proposed digital token – Libra – is going to put Mark Zuckerberg’s social network under tough scrutiny by financial regulators. Three: The US dollar reigns supreme.
It will hurt Bitcoin supporters to hear it, but it looks like Trump is listening to the establishment and bringing the hammer down on potential threats to the dollar’s status as the world’s reserve currency, and with it the ability to enforce US policy worldwide.
Despite repeatedly bashing Fed Chairman Jay Powell over interest rates – “way too high," Trump groused in June – the president’s tweets echo the central banker’s views on crypto. Bitcoin is a “speculative store of value" that has failed to catch on, Powell said on Capitol Hill this week. He warned that Libra, in particular, raised serious concerns about financial stability and regulation.
Trump’s preoccupation with Facebook’s digital token is probably not whether Zuckerberg’s project conducts adequate know-your-customer and anti-money-laundering checks. For the president, it’s more likely to be a question of whether the cryptocurrency will serve American interests or undermine them. Libra’s ambition is to be a cross-border medium of exchange, effectively operating outside the banking system and catering to at least two billion users across Facebook, Instagram and WhatsApp.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.