Bitcoin has started to rise once again following a massive dip that threatened to drag price below $9,000. The rise seems to coincide with a statement made by the U.S Treasury Secretary Steven Mnuchin that cryptocurrency especially Libra could be taken advantage of by criminals for illicit activities.
While this is a rather negative statement that could potentially damage the industry, it obviously did not and Fundstrat’s head of research, Tom Lee believes the fact that Bitcoin is rising despite the statement is proof that the market does not care about the statement.
Bitcoin seems comfortable with statements made by #Mnuchin regarding Crypto and KYC/AML.
– White House wants fair ground rules but does not seem intent on further action at this time.
– $BTC rise shows market comfortable with this
— Thomas Lee (@fundstrat) July 15, 2019
Bitcoin suddenly started to rise as if triggered by Mnuchin’s statement which indicated that the U.S has serious reservations on the cryptocurrency industry and will ensure that the industry does not operate “in the shadows”.
This implies the need for KYC for cryptocurrency users around the world which could make the process of buying and selling crypto more difficult especially for those who use exchanges.
U.S President Donald Trump also spoke on Bitcoin and cryptocurrency last week. He said Bitcoin and cryptocurrency are not real money and based on thin air. On Libra, he said Facebook would have to comply with all banking regulations if it wants Libra to be recognized as a currency in the U.S. Although he clearly stated his position as an enemy of cryptocurrency, the statement did not seem to have any effect on Bitcoin at the time, at least not a negative one.
If anything, Trump’s statement was said to be positive publicity for Bitcoin ad the whole industry as it suggested that the U.S government was aware of the industry’s progress. It seems the publicity actually helped as Bitcoin rose from its 24 hour low of $9,992 to over $10,800 at the time of writing.
Lee says Mnuchin’s statement has not affected Bitcoin because of the price, but what if it actually affected the price positively by causing the rise? Libra, on the other hand, could have an uncertain future as Mnuchin says its approval could take longer than expected and the fact that it is coming to compete with existing banking infrastructure could be a reason it would face some tough times with regulators.