According to a tweet by Donald Trump, cryptocurrencies and even bitcoin are not currencies, their value is highly volatile and they are based on thin air.
In addition, being unregulated, Trump believes they can facilitate illegal behaviour, including drug trafficking and other illegal activities.
This is what the President of the United States has stated on Twitter, where he also declares that he is not a fan of Bitcoin.
He also added a critique of Libra, Facebook’s cryptocurrency.
Trump has written that, in his opinion, such currency will have little reliability and has asked companies that want to issue their own cryptocurrency to become effective banks, so as to be subject to all the relevant regulations, exactly like banking institutions.
Finally, he concluded by saying that the US dollar is stronger than ever and is by far the most dominant currency in the world, and will always remain so.
Many are wondering why President Trump has waited until now to express these views and some suggest that this might be his response to recent statements by Fed Governor Jerome Powell.
In fact, Powell said that Bitcoin is being used as a speculative store of value in some ways similar to gold and that a new era may begin in which the US dollar may no longer be the only currency in circulation in the United States of America.
The relationship between Trump and Powell has been far from idyllic lately, so much so that the President of the United States is trying to interfere with the monetary policy of the Federal Reserve, although in theory, he should not.
The main issue is the interest rate cut: Trump would like the rates to be immediately reduced to facilitate the injection of new liquidity into the markets, while Powell is much more cautious due to inflation concerns.
However, inflation in the US has been falling in recent months, so it is possible that Donald Trump will eventually win the battle. In addition, a possible increase in the liquidity of dollars in the markets, or a consequent increase in inflation, according to several analysts could actually favour bitcoin itself.