$BTC & the Digital Dollar

Macro Perspective: Thu 24 Jun 2021

Yesterday we talked about the prospects of a digital dollar coming down the line. It seems clear that global governments will not allow non-sovereign forms of money to continue to proliferate.

The Senate Banking committee's hearing on the digital dollar two weeks ago was not only a public exploration and introduction to the concept of a central bank-backed digital currency, the hearing was also used as a platform to publicly assassinate the viability of the private ("bogus" in the words of Senator Warren) cryptocurrency market (bitcoin, stablecoins ...).

With this in mind, the Chinese government has continually tightened control over the crypto market in China, most recently cracking down on cryptocurrency mining in the country. The U.S. Justice Department announced a few weeks ago that it "recovered" $2.3 million in cryptocurrency of the ransom collected from the Colonial Pipeline hack. Yesterday, it was reported that South Korea seized almost $50 million of crypto assets from citizens accused of tax evasion.

So the benefits of the private cryptocurrency market are being deconstructed by governments. Add to that, even after gaining traction, the private crypto market continues to be used primarily as a tool of corruption and speculation - this chart setup argues for a typical bubble outcome (crash).