When is Bad News Good News?
When It’s About Bitcoin
This week Donald Trump spoke to Fox News about bitcoin, “I don’t like it because it’s competing against the dollar and I want the dollar to be the currency of the world.” That sounds like bad news for bitcoin but the truth is, there are 7.9 billion people in the world and only 331 million of those are US citizens. People like bitcoin because it’s not tied to any nation, it’s a global network.
The Chinese government have banned bitcoin mining. That sounds like bad news for bitcoin but China is a highly authoritarian state and they ban a lot of things. Twitter, Facebook, Youtube, Google, Wikipedia, Netflix, Instagram, WhatsApp, Reddit, Winnie the Pooh... It’s surprising bitcoin hasn’t been banned outright. They have threatened many times. It’s a testament to its sticking power and it’s ability to continue producing block after block regardless of external factors.
A further positive effect of the mining ban is it forces bitcoin miners away from the coal mining plants in Szechuan that they were getting their energy from. That’s probably a good thing for bitcoin and everyone else. At the same time, Canada and certain states of the US are opening up to bitcoin mining and incentivising renewable energy resources.
But it goes the other way too. Good news can be bad news with bitcoin. President Bukele in El Salvador announced his administration will be making bitcoin legal tender. That sounds good news but it could turn out to be El Salvador are intending to use bitcoin on the foreign exchange market. If other nations interact with it, it would be quite a foothold for bitcoin. Still sounds like good news but you have to wonder if the US will allow bitcoin to be traded on the foreign exchange market. Being perceived as a threat to the dollar could cause problems for bitcoin and the International Monetary Fund may make moves against El Salvador and their desire to use bitcoin.
Currently, we don’t know if the central and commercial banks in El Salvador are buying bitcoin for their reserves. If they do, they may just hodl. But regardless, there are opposite reactions to these stories — people have different reasons for thinking something is good or bad. In the case of bitcoin most people don’t care enough to untangle what they think about these stories anyway. They glimpse a headline in the paper on the way to work, or briefly see it on the news at dinnertime. Very few are paying attention.