The president is moving ahead with a full-on embrace of the entire crypto industry

[ZiprHead]

Trump proposal to create 'crypto strategic reserve' vexes some industry supporters

The president is moving ahead with a full-on embrace of the entire crypto industry, which critics say raises ethical and even legal concerns.

www.nbcnews.com

President Donald Trump said Sunday that he is directing his newly created digital assets working group to move forward on creating a “crypto strategic reserve” along the lines of existing U.S. reserves of gold and oil.

Yet details of the proposal left many observers frustrated, including some longtime Trump and crypto supporters. These critics say Trump’s reserve proposal features several other crypto tokens that are seen as much riskier assets, some of which also have private backers who could directly benefit from any investment by the U.S.

 

[Ford]

I watched this video from The Bulwark (mostly never-Trump Republicans) that spells out a few key points.



We're long since past the time when crypto was considered to be a substitute for currency. You're not gonna buy a pizza with Bitcoin. It's a wealth extraction tool.

 

[Ruth Harris]

We're long since past the time when crypto was considered to be a substitute for currency. You're not gonna buy a pizza with Bitcoin. It's a wealth extraction tool.

Yep, with one proviso: I don't know that crypto was ever really a substitute currency, other than its purported use by criminals to avoid tracking their crimes for prosecution. But even in that case, it was converted to the currency of choice as quickly as possible for use in the real world.

There has never been any "there" there. Crypto has no backing with either assets or faith in the government and has no intrinsic value. It is quite simply fueled by a belief in the "bigger fool" theory of investing.

Ruth

 

[Jimmy Higgins]

A reserve is that reserves are supposed to be back ups. We have an oil reserve in case we need to access it in order to ensure we don't have a debilitating gasoline or oil shortage. We have a massive stockpile of gold. Gold has value both in being pretty, having industrial purposes, and inertially used as a currency in recent history. Both of these things are natural resources.

Crypto? What value is there to a reserve of crypto? You only sell it. You can't use it. Gold has use, oil has substantial use that can make its value be somewhat irrelevant as its industrial applications are worth more than it is worth. Crypto is only valuable based on its current value.

 

[ideologyhunter]

There has never been any "there" there. Crypto has no backing with either assets or faith in the government and has no intrinsic value. It is quite simply fueled by a belief in the "bigger fool" theory of investing.

Well said...and, where else have folks talked to me in these terms? "No, I can't put it in your hand, but it's there, it's real, it's just in another realm, and you must have faith in its value and importance. Others have put their faith in it. Be like them. Embrace it, and there is a great and glorious future ahead." Who talks this way?? Can't put my finger on it.

 

[Elixir]

Never met a scam he didn’t want in on.

 

[TV and credit cards]

There has never been any "there" there. Crypto has no backing with either assets or faith in the government and has no intrinsic value. It is quite simply fueled by a belief in the "bigger fool" theory of investing.

I believe there are crypto loans. If a financial institution is willing to give a loan using crypto as collateral then the crypto has value.

 

[bilby]

If a financial institution is willing to give a loan using crypto as collateral then the crypto has value that institution is either criminal, or batshit crazy, and needs to be shut down by the SEC before all of its investors lose their shirts.

FTFY.

 

[Ruth Harris]

I believe there are crypto loans. If a financial institution is willing to give a loan using crypto as collateral then the crypto has value.

Not by any major financial institution that I am aware of. The only places that offer loans backed by crypto are fintechs with no regulations or crypto based firms.

I belong to an invitation only group of several hundred people providing feedback that is run by a major US bank where I have an account. Last year they had a poll and related discussion asking if the members would be in favor of the bank investing in/allowing crypto. It was slammed down hard by us. I haven't heard another word about the subject since then.

Ruth

 

[Loren Pechtel]

I'm not going to watch the video but from the moment I saw the news it was obvious--buy up $TRUMP. It's purely a means of extracting money from the US Treasury.

 

[TV and credit cards]

I believe there are crypto loans. If a financial institution is willing to give a loan using crypto as collateral then the crypto has value.

Not by any major financial institution that I am aware of. The only places that offer loans backed by crypto are fintechs with no regulations or crypto based firms.

Nor am I aware of any. I'm simply making a statement of fact in that I assume these loans are available to the general public. To me this equates to crypto having value.
Personally I still struggle with the value of gold and its been holding up for thousands of years.

I belong to an invitation only group of several hundred people providing feedback that is run by a major US bank where I have an account. Last year they had a poll and related discussion asking if the members would be in favor of the bank investing in/allowing crypto. It was slammed down hard by us. I haven't heard another word about the subject since then.

Ruth

If conditions were ripe do you think yours or other major US financial institutions would change their position on crypto loans? I say this with subprime mortgages in the back of my mind. Never underestimate greed or our lawmakers ability to sit on their hands until the shit has already hit the fan.

****

Items in the video of post #2 that drew my attention as being questionable.
-That crypto is a security. Gary Gensler's SEC lost the lawsuit that defined crypto as a security. That court case ran for years and concluded almost a year ago. There was no settlement. The SEC lost.
-Also mentioned was the anonymity of crypto. I don't think this is as true as it used to be. It is not so for cryptocurrency exchanges in the US (know your customers law) and may be so by varying degrees with accounts in other nations but even still there is a digital trail to follow if need be. It's recorded on an indelible blockchain. It's there forever. So this whole criminal money laundering I think is largely from the early days of crypto and the person being interviewed in the video must know this. If there is, I think it would be some crypto created for just that purpose but this can be true of any money laundering scheme. There will always be this cat and mouse game between criminals and law enforcement.

 

[Axulus]

I believe there are crypto loans. If a financial institution is willing to give a loan using crypto as collateral then the crypto has value.

Not by any major financial institution that I am aware of. The only places that offer loans backed by crypto are fintechs with no regulations or crypto based firms.

I belong to an invitation only group of several hundred people providing feedback that is run by a major US bank where I have an account. Last year they had a poll and related discussion asking if the members would be in favor of the bank investing in/allowing crypto. It was slammed down hard by us. I haven't heard another word about the subject since then.

Ruth

Just about any brokerage firm will allow margin loans backed by crypto. Robinhood, coinbase, among others. These are regulated with market caps in the tens of billions. I'd also be surprised if other more mainstream wall street firms didn't allow crypto to be used as collateral for loans.

 

[KCFlyer]

I believe there are crypto loans. If a financial institution is willing to give a loan using crypto as collateral then the crypto has value.

Not by any major financial institution that I am aware of. The only places that offer loans backed by crypto are fintechs with no regulations or crypto based firms.

I belong to an invitation only group of several hundred people providing feedback that is run by a major US bank where I have an account. Last year they had a poll and related discussion asking if the members would be in favor of the bank investing in/allowing crypto. It was slammed down hard by us. I haven't heard another word about the subject since then.

Ruth

Just about any brokerage firm will allow margin loans backed by crypto. Robinhood, coinbase, among others. These are regulated with market caps in the tens of billions. I'd also be surprised if other more mainstream wall street firms didn't allow crypto to be used as collateral for loans.

At least during the beanie baby craze people actually had SOMETHING they could physically hold. I will admit that I don't know all that much about crypto, but when one is "mining" for crypto, how does one know that they have found a nugget? And while the algorithms are really cool, how much different are they from random number generators?

 

[Axulus]

I believe there are crypto loans. If a financial institution is willing to give a loan using crypto as collateral then the crypto has value.

Not by any major financial institution that I am aware of. The only places that offer loans backed by crypto are fintechs with no regulations or crypto based firms.

I belong to an invitation only group of several hundred people providing feedback that is run by a major US bank where I have an account. Last year they had a poll and related discussion asking if the members would be in favor of the bank investing in/allowing crypto. It was slammed down hard by us. I haven't heard another word about the subject since then.

Ruth

Just about any brokerage firm will allow margin loans backed by crypto. Robinhood, coinbase, among others. These are regulated with market caps in the tens of billions. I'd also be surprised if other more mainstream wall street firms didn't allow crypto to be used as collateral for loans.

At least during the beanie baby craze people actually had SOMETHING they could physically hold. I will admit that I don't know all that much about crypto, but when one is "mining" for crypto, how does one know that they have found a nugget? And while the algorithms are really cool, how much different are they from random number generators?

In terms of collateral for a loan, a lender cares about whether the asset is liquid and has an identifiable market value. In the case of the most popular cryptos, both boxes are checked. The crypto collateral can be liquidated if it falls below a certain value, allowing the lender to have the loan repaid.

In terms of obtaining it and who owns what, and how it can be mined, that is determined when it was set up and governed by the network of computers that run and operate that particular crypto.

 

[KCFlyer]

In terms of obtaining it and who owns what, and how it can be mined, that is determined when it was set up and governed by the network of computers that run and operate that particular crypto.

Sorry...but that sounds kind of like money for nothing

 

[bilby]

In terms of obtaining it and who owns what, and how it can be mined, that is determined when it was set up and governed by the network of computers that run and operate that particular crypto.

Sorry...but that sounds kind of like money for nothing

Only because it is.

But bear in mind that's not a point of distinction between crypto and fiat currencies (eg the US Dollar), which can be created from nothing by the mere act of borrowing from a commercial bank that has no obligation to draw those funds entirely from reserves on hand.

Ultimately all fiat money is money for nothing. That's not a bug, it's a feature.

 

[Loren Pechtel]

In terms of obtaining it and who owns what, and how it can be mined, that is determined when it was set up and governed by the network of computers that run and operate that particular crypto.

Sorry...but that sounds kind of like money for nothing

Only because it is.

But bear in mind that's not a point of distinction between crypto and fiat currencies (eg the US Dollar), which can be created from nothing by the mere act of borrowing from a commercial bank that has no obligation to draw those funds entirely from reserves on hand.

Ultimately all fiat money is money for nothing. That's not a bug, it's a feature.

Yup, because any money that is actually tied to something is vulnerable to changes in the something. Fiat money is tied to people's perception of the value and thus is not subject to big market-driven swings. (However, it is vulnerable to political swings.)

 

[ZiprHead]

Another new Trump-backed crypto currency:

Trump's World Liberty token falls in first day of trading

Although it did fall on the first day of trading, this is still essentially creating money out of thin air. $7 billion in current valuation even after the drop.

The tokens initially traded above $0.30 in their Monday debut but later fell in price. They were down about 12% at $0.246 as of 1840 GMT, according to CoinGecko data.
That gave the token a total market capitalisation of just below $7 billion, making WLFI the 31st largest crypto token in circulation, CoinGecko data showed.
Several of the world's biggest cryptocurrency exchanges, including Binance, OKX and Bybit, are offering the tokens on their platforms.
Since World Liberty's launch last year, the Trump family has made around $500 million from the project, according to Reuters calculations based on the company's terms and conditions, transactions traced by crypto analysis firms, and publicly disclosed deals.

Money for nothing and chicks for free.

 

[Jimmy Higgins]

In terms of obtaining it and who owns what, and how it can be mined, that is determined when it was set up and governed by the network of computers that run and operate that particular crypto.

Sorry...but that sounds kind of like money for nothing

Only because it is.

But bear in mind that's not a point of distinction between crypto and fiat currencies (eg the US Dollar), which can be created from nothing by the mere act of borrowing from a commercial bank that has no obligation to draw those funds entirely from reserves on hand.

Ultimately all fiat money is money for nothing. That's not a bug, it's a feature.

Fiat money exists to provide a mechanism for economic efforts. When it works best is when it is stable.

Digital currency is about making imaginary money to transfer into Fiat money. Being rich in Bitcoin means nothing. It only means something when you turn it into real money. Which means it works best when its value is continues to move skyward and lacks stability. It is like buying a spring football league team in the US and demanding your team be put into the NFL.

My fear is that everyone is starting to look at crypto as a no-lose thing. And that's where the scandals and massive money losses that involve government involvement and prison sentences come from. Now days, it is a create a currency and skim money on the trades.