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Tuesday, June 15, 2021
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Bitcoin: Will Central Banks Ban it or Buy it?

That I think is the big Bitcoin question, where will it eventually land with the regulators, particularly the US regulators.

Under new proposed regulations from the Financial Crimes Enforcement Network, it may become much easier for the government to track bitcoin transactions, that may help ease the nerves of regulators but there is still some concern that a rogue regulator would try to make a name for themselves attacking Bitcoin.

The U.S. Federal Reserve controls the money supply in the United States so one would expect them at some stage to have something to say about Bitcoin.

Taxation of course will be the driver, The Fed and the US Government will want to know everything they can about everyone’s transactions and holdings, that of course is true even now, if you are American then disclosure of all assets and income is mandatory regardless of your location.

The Musk Effect

Elon Musk having spearheaded the Tesla purchase of $1.5b in Bitcoin has lifted the Crypto world out of the “Criminals and Drug Dealers” world and brought it front and centre as an asset class.

This may well be the key to protecting Bitcoin from overzealous regulators in the future.

Tesla also revealed that it plans to accept bitcoins as a form of payment in the near future — the biggest vote of confidence the crypto market has received yet.

Musk said a week ago that bitcoin was “on the verge” of being more widely accepted among investors, and in December asked if it was possible to do large transactions in the currency.

In its annual report, Tesla said it updated its investment policy in January so it could have “more flexibility to further diversify and maximize returns” on any extra cash it was sitting on.

The new policy was broad enough that Tesla could invest in “specified alternative reserve assets”.

So it decided to put $US1.5 billion into bitcoin, and is expecting to allow customers to start paying for their cars using the cryptocurrency “in the near future”.

Elon Musk changed his Twitter bio to “#bitcoin.” This alone perhaps wouldn’t be that interesting — after all, Musk expressed his interest in Bitcoin and cryptocurrencies before — but Musk followed up with a cryptic tweet that might indicate he’s actually bought some Bitcoin. 

The Impact of Michael Saylor

‘You’re Going to See an Avalanche of Companies in the Coming 12 Months’

During the event last Wednesday, participants could learn about how preserving wealth is extremely difficult in 2020 and beyond.

Capital costs have jumped significantly, and the virtual conference gave participants a great overview of bitcoin-based corporate strategies and operational considerations.

While speaking at the event, Michael Saylor said he expects big things for bitcoin and expects a herd of firms to join the growing bitcoin treasuries list.

“The reason we’re having this conference is to help everybody else figure out what they should do,” the executive said.

The Microstrategy CEO also added:

The simple solution is [to] convert some of that cash into bitcoin— We did it, Square did it. You’re going to see an avalanche of companies in the coming 12 months also converting their balance sheets into bitcoin because it’s a scarce digital safe-haven asset.

S. Jack Heffernan Ph.Dhttps://www.shayneheffernan.com
S. Jack Heffernan Ph.D. Funds Manager at HEFFX holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.

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