All means are good - When it comes to digital currencies, it seems that everything is cyclical, even legislation. The summer of 2021 will be one of regulation for digital assets and crypto businesses. Indeed, regulators around the world have been cracking down on the cryptosphere for several weeks now. Whether it's the Financial Action Task Force (FATF), the European Commission, or even the countries themselves, everyone seems to want to harden their stance on Bitcoin and cryptos. The last time we saw this much hype about cryptocurrency oversight was during the 2017 bull run.
Senator Elizabeth Warren goes to war against Bitcoin and cryptocurrencies
In an interview for CBNC on July 28, Senator Elizabeth Warren once again asserted her dislike for digital assets. According to her, it is absolutely necessary that all companies working around Bitcoin and cryptocurrencies operating in the United States follow common rules:
"I don't want to wait for a whole bunch of people, a whole bunch of small investors, a whole bunch of small traders to be completely annihilated [...] "Who benefits from the lack of rules? It's the giants. Who wins when there are no police on patrol? It's the giants."
More to the point, Warren didn't attack digital currencies, but the people who use them to abuse the gullibility of investors. It's hard not to agree with the senator on this point as it's so common for seemingly innovative projects to be pure scams. Finally, Elizabeth Warren wants digital assets to be taxed more heavily, especially when they are held by wealthy individuals.
The United States is preparing a new tax on Bitcoin and digital assets!
As part of his economic stimulus package, President Biden has designed a massive infrastructure plan. The goal of this plan is to help the economic recovery by renovating the existing infrastructure. The plan includes the creation and renovation of bridges, roads, railroads, but also the construction of green infrastructure such as electric vehicle charging stations.
U.S. senators agreed on July 28 to a $550 billion investment plan. The new agreement significantly changes the way infrastructure spending will be funded, after Republicans objected to a pillar of the original framework: increased revenue from IRS tax enforcement.
Instead, negotiators agreed to reallocate more than $250 billion from previous crisis relief legislation, including $50 billion from increased unemployment benefits that were prematurely cancelled this summer by two dozen Republican governors.
In addition, the latest iteration of the bill calls for new reporting requirements for cryptocurrencies and increased crypto taxes. The increased regulations could bring in as much as $28 billion. Under the proposed measures, cryptocurrency brokers and exchanges would be subject to increased reporting requirements. Under the legislation, all businesses sending or receiving digital assets in excess of $10,000 will have to report these transactions to the Internal Revenue Service (IRS).
Opinions are divided when it comes to Bitcoin maximalism. Some say: Bitcoin maximalism means to think the advantages of the digital currency compared to the fiat money system consistently to the end. Others say that a global economy based solely on Bitcoin is absurd and, moreover, deflationary.
Bitcoin maximalism, however, is more than a preference for Bitcoin over altcoins. For its proponents see the No. 1 cryptocurrency as nothing less than a paradigm shift within the macroeconomic fabric of our global economy. Central banks would be obsolete, inflation impossible, and exchange rates. We take a closer look at the phenomenon. The following are five sentences a Bitcoin maximalist would never say.
"Bitcoin is dead"
One trait of Bitcoin maximalists is their unwavering belief in the value of the cryptocurrency. Every crash is accepted with demonstrative composure and reinterpreted as a necessary correction for the long-term development of the price. After all, Bitcoin maximalism also means proving one's staying power. Only those who have walked through several valleys of tears may reap the long-awaited fruits of "hyperbitcoinization", so the theory goes. Or to put it in a word: Hodl.
"I live vegetarian."
Granted this certainly doesn't apply to all Bitcoin maximalists. We have already reported on the apparently existing connection between an all-meat diet and BTC here.
At this point, we let Michael Goldstein speak for us and wish you bon appétit:
The connection is intuitively obvious. Bitcoin is a revolt against fiat money and an all-meat diet is a revolt against fiat food.
"Keynes was actually a great guy".
Bitcoin maximalism, is also the clash of two schools of thought in economics. Bitcoin maximalists usually classify themselves as belonging to the so-called Austrian School of National Economics. Prominently represented by Friedrich von Hayek - a bitter opponent of the famous John Maynard Keynes. To make a long story short: The theories and implications of the two schools are incompatible. While Keynes wants to see the monetary economy in the hands of the state, Hayek advocates an economic liberal system in which different circulating forms of money compete with each other. At the Bretton Woods conference, Keynes idea ultimately prevailed.
"A little inflation is okay"
Bitcoin maximalists are not fans of central banks. If maximalist Saifedean Ammous is to be believed, the abolition of the gold standard and the introduction of a monetary system under the thumb of central banks was the beginning of the end. This may sound exaggerated.
But there is no denying that central banks have a more or less free hand in their monetary policy. They often live up to the responsibility this entails for national economies. In some cases, however, central bankers turn the wrong macroeconomic screws - with disastrous consequences.
This is why many Bitcoin maximalists are calling for the abolition of the central banking system. After all, they argue, even solidly functioning central banks at least ensure a steady, albeit low, rate of inflation, and even that is unhealthy in the long run.
With Bitcoin as a reserve currency, this problem is obsolete. Because Bitcoin has an intrinsically deflationary structure due to its design and this is good for a sustainable global economy without boom-and-bust cycles and demonetization, maximalists say.
"Sure I'll invest in Bitcoin Cash too".
BCH, or "BCash", is the Bitcoin maximalist's public enemy number 1. Bitcoin Jesus has become Bitcoin Judas, as Roger Ver has gambled away many sympathies since the infamous hard fork. Since then, the BCH daddy has had to answer for a lot of things that are going wrong in the crypto cosmos. Admittedly, Ver has done the ecosystem a disservice with the fork and the associated division of the community into two camps. However, the polemic that Ver is facing doesn't get us anywhere either.
Ferdous Bhai summarizes why a little currency competition among crypto assets can actually be beneficial in a blog post:
I want Bitcoin to win, and I will continue to build and support companies that make Bitcoin better, stronger, and more accessible. But we must never lose sight of the goal. Bitcoin is not the main goal; it is a means to achieve our goal of a censorship-resistant, independent, and denationalized currency.
Does the movement have a chance?
Bitcoin maximalism is a fascinating metier. This is because the mindset wants the big picture. To be sure, many contexts seem plucked out of thin air and unrealistic. Nevertheless, it is worth taking an in-depth look. If you have the time, you can immerse yourself in a debate between hard-money theory, technological innovation and the prospect of witnessing an economic paradigm shift. In a nutshell, bitcoin maximalism is a real-time experiment in the tension between Keynesianism and the Austrian School of National Economics. It remains exciting.
The newsflow in recent days has been surprisingly positive, with cryptocurrencies making strong gains across the board. Bitcoin, the number one by market capitalization, made a particularly strong comeback. Now, the price is trading just before a crucial resistance. These marks are currently in the focus of investors.
Until mid-July, the mood on the crypto market was gloomy. Many cryptocurrencies had been on a downward slide for weeks and there was no end in sight. Bitcoin (BTC) even sank below the important psychological 30,000 dollar mark in the meantime. Last-minute rescue came from the crypto conference "The B-Word", where well-known entrepreneurs and investors such as Elon Musk, Cathie Wood and Jack Dorsey reaffirmed their enthusiasm for cryptocurrencies. Bitcoin then starts a powerful rebound from July 21.
The current price increase of 37 percent in just six trading days is the largest this year. As a result of the current rally, the price is now trading above the important psychological $40,000 mark again. Things are getting exciting now, as the price is close to the massive resistance at 41,322 dollars. Profit-taking may occur here in the short term.
However, the overriding picture has brightened again significantly and so the profit-taking should only be short-lived. As soon as the price has mastered the resistance, a new buy signal is triggered and additional positive momentum is created.
Sentiment has turned 180 degrees in a week and many cryptocurrencies like bitcoin are recovering strongly. Although the price is still in its week-long sideways range, this should be left upwards in the coming weeks.
When people think of cryptocurrencies, bitcoin comes to mind first and foremost. But in the shadow of its big brother, two other digital currencies have also fought their way to the top: Ether and Dogecoin.
What do Tesla CEO Elon Musk, U.S. rapper Snoop Doog, and rock band Kiss' bassist Gene Simmons have in common? Aside from all being world famous, they're currently riding high on a very specific cryptocurrency: the Dogecoin. They recently shared this publicly on Twitter - and created a new trend in the crypto world with their millions of followers.
Now, at the latest, the Japanese dog breed Shiba Inu is not only known to animal lovers. Because it adorns the logo of one of the most popular cryptocurrencies. For a long time, the image was only circulated as a meme on the Internet. Now investors around the world have become aware of the coin with the dog symbol. Dogecoin temporarily rose to a new record high of 8.6 cents on Monday.
That is truly not much. But: Once thought to be merely a parody of the most important and best-known cyber currency Bitcoin, Dogecoin has recently become one of the ten largest digital currencies - with a market capitalization of over ten billion dollars.
Investors are investing in Musk's vision
Compared to Bitcoin, where the value of all "thalers" in circulation is currently around $800 billion, according to Coinmarketcap.com, this is only a fraction. However, Dogecoin has many prominent supporters, which has meteorically accelerated its rise.
Just two weeks ago, one Dogecoin cost less than a cent. Suddenly, the price skyrocketed. Similar to the Gamestop case, private investors are said to have arranged to buy via forums like Reddit.
Last Thursday, billionaire and Tesla CEO Elon Musk finally posted a picture of a moon rocket with the single word "Doge" underneath. Shortly after, he supplemented the whole thing with the words "Dogecoin is the cryptocurrency of the people" on. The value of the cryptocurrency went through the roof, increasing by about 50 percent in one day.
Musk enjoys great prestige among his followers; both as a social media player and as a businessman, said Neil Wilson, chief analyst at online broker Markets.com. "People are literally investing in him and his ideas." What those ideas are ultimately about doesn't matter, he said.
Celebrities accelerated the trend
Since Musk's tweet, Dogecoin has climbed a whopping 115 percent. Over the weekend, the Tesla CEO again promoted the currency heavily to his roughly 46 million followers. "Musk had posted an educational video about said currency, among other things, over the weekend," said analyst Timo Emden of Emden Research. "Speculators seem to continue to like the currency and blindly follow Elon Musk."
Other celebrities joined the entrepreneur. Rapper Snoop Dog, for example, posted a picture of a dog wearing a cap and leather jacket and the words "Snoop Doge." Dogecoin was again high in Twitter trends on Monday.
Yet the fun coin originally had no value at all. Jackson Palmer, an employee of the software company Adobe, wanted to make fun of the hype around cryptocurrencies in 2013 and created the crypto coin as a result. On it: the Internet meme "Doge."
Unlike Bitcoin, of which only 21 million are available in total, the number of Dogecoins is unlimited. The digital coins can be generated by "mining," as with other cyber currencies. The "miners" provide computing capacity for encrypting transactions and search for new blocks by performing some kind of computational task. As a result, they are rewarded with the respective cryptocurrency. Since Dogecoin's encryption is simpler, transactions can be processed faster than Bitcoin.
The current rally in the internet currency, which started as a joke, will turn out to be a flash in the pan, analyst Emden warned. "For investors, the market environment with Dogecoin is like going to the casino." That's because even a small amount of investors could trigger sharp price movements up or down in such a coin's price in the crypto market, he said.
Bitcoin and Ether on record chase
Dogecoin is not the only one currently soaring. After a minor dry spell as a result of a discussion about stricter regulation of the crypto market, Bitcoin also got a significant price boost on Monday and once again rose to a record high. This was triggered by a stock exchange announcement according to which Musk's company Tesla has invested in the digital currency and wants to allow it as a means of payment in the future.
Ethereum is actually not just a currency, but a platform that can also be used to map business processes. With digital contracts, so-called smart contracts, for example, transfers can be linked to the fulfillment of certain conditions or seals of approval.
According to the asset manager Grayscale, transactions with a volume of twelve billion dollars are currently processed daily via smart contracts and Ethereum. The digital currency on this platform is called Ether.
Sign against trading restrictions?
Experts at 21Shares describe the growing popularity of Ether and Co. as a sign against trading restrictions by big-tech platforms such as broker Robinhood, for example at Gamestop. The long-term promise of Ethereum is to enable applications that prevent the influence of monopolies in the digital economy, Ige and Ndinga point out.
Cameron Winklevoss, one of the founders of crypto exchange Gemini, has a similar opinion regarding Dogecoin. "Doge is a form of protest. People are tired of the modern money monopoly. They are tired of being told what money is and what they are allowed to do with it," he wrote on Twitter in late January. The crypto market is lightly regulated, which makes trading restrictions almost impossible, unlike the stock market.