While U.S. regulators are quietly raging a war on cryptocurrencies (as we wrote here)… U.S. President Donald Trump is about to help them go mainstream.
To be clear, Trump hasn’t spoken a word about bitcoin or cryptocurrencies in public. But his policies and decisions (whether intentional or not) are making bitcoin look more attractive.
Here are just three ways Trump could help catapult bitcoin – and other cryptos – into the mainstream…
1. A “bitcoiner” at the gate
Every office has its gatekeepers. They decide who sees the boss. They control the flow of information in and out of the office. And they help the boss push his or her agenda.
The president’s gatekeeper is his chief of staff. Among other things, the chief of staff controls the flow of people and information into the Oval Office, negotiates with Congress to implement the president’s agenda and advises the president on various issues.
And Trump’s acting chief of staff, Mick Mulvaney, is one of the biggest blockchain proponents in Washington (blockchain is the technology behind cryptos like bitcoin).
Mulvaney co-founded the Congressional Blockchain Caucus. Its goal: keeping Congress informed on blockchain technologies.
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“Blockchain technology has the potential to revolutionize the financial services industry, the U.S. economy and the delivery of government services, and I am proud to be involved,” Mulvaney said when the organization launched in 2016.
His most important objective is to stop Congress from passing hasty blockchain legislation. Mulvaney understands that aggressive regulation is one of the fastest ways to kill new technology.
“I see potential for bitcoin as a medium of trade and as a transactional tool, and I’d hate to see the government make decisions early that sort of retard its growth,” he said.
In short, Mulvaney could influence Trump’s views on bitcoin and crypto… and his background suggests he’ll push for more adoption and less government intervention.
2. A US$148 billion opportunity
Last month, news broke that Trump is considering a remittance tax to curb illegal immigration. This would be a special tax on money migrants send from the U.S. to their home countries.
In theory, the tax would mean migrants couldn’t send as much money home (because they’d be paying more in taxes and fees). That would make it less desirable for them to go to the U.S. in search of work.
In practice, though, migrants would probably keep coming. They’d just find creative new ways to send money across the border.
And bitcoin and other cryptos are the perfect option. Not only are they faster and cheaper than using the traditional financial system, but they can’t be easily blocked by governments.
The sum of money we’re talking about here is enormous.
For example, Mexico is the largest recipient of remittances from the U.S. More than US$25 billion is sent from the U.S. to Mexico every year (that’s more than US$68 million per day).
And there’s already growing interest in bitcoin in Mexico. Even with fairly stringent crypto regulations in the country, bitcoin trading on one site recently hit a record high there.
The Mexican government also won’t just accept the tax. US$25 billion is equivalent to 2.2 percent of Mexico’s entire economy. So a remittance tax could seriously damage the economy.
To make sure that money keeps flowing into the country, Mexico’s government could make using cryptocurrencies easier by passing crypto-friendly regulations.
And Mexico is just a piece of the pie. Altogether, migrants send US$148 billion out of the U.S. every year.
Even the suggestion of a remittance tax will encourage more migrants to start using cryptocurrencies to send money home and governments like Mexico to make more crypto-friendly regulations.
Mark your calendar for May 13th. That’s when cryptocurrency expert Eric Wade says, “Bitcoin will reprice 10x higher in a one-time-only event. It’s the best profit opportunity I’ve ever seen.”
3. The “king of debt” is digging the dollar into a hole
I’ll never forget when Trump went on CBS This Morning in 2016 and called himself the “king of debt”.
“I’m great with debt,” he said. “Nobody knows debt better than me. I’ve made a fortune by using debt, and if things don’t work out, I renegotiate the debt… You go back and you say, hey guess what, the economy crashed. I’m going to give you back half.”
He’s brought a similar mindset to government spending. Under his watch, the size of the U.S. national debt is growing faster than ever. It’s now at a record high US$22 trillion and counting.
To put that number in perspective, it’s 108 percent of the country’s total economic output every year. That’s far higher than the 77 percent debt load that economists believe is sustainable.
The moment foreign investors, banks and governments doubt the U.S. can pay back its debt, they’ll stop lending it money. And that means the U.S. will have to pay even higher borrowing costs to attract new lenders.
Here’s the hard truth, though: the U.S. can’t afford higher borrowing costs. As we’ve written before, the Federal Reserve is already insolvent by one accounting measure.
To pay off its debt, the government will eventually have to print new dollars out of thin air. Inflation will accelerate. And investors will have to find a place outside U.S. dollars to store their value.
They can turn to gold. They can turn to stocks or the yuan. Or they can turn to bitcoin.
My money’s on bitcoin. And I think Wall Street is preparing for that exact future.
Bitcoin is inflation-proof. It’s portable, and it’s easy to trade. Most importantly, no government or president can manipulate it. That’s why it should be a part of every portfolio.
And Trump’s policies are making it a more compelling asset every day.
So if you don’t already own bitcoin, now is the time.
Cryptocurrency Analyst, Stansberry Pacific Research
P.S. Trump’s policies are just one reason we believe the next bull market in cryptocurrencies is coming. In our recent report, we explain the big event happening soon in cryptocurrencies. It could cause a massive amount of money to flow into the space – and some cryptos could soar 100x. You can get the full story here.