The U.S. Secretary of the Treasury, America’s top executive official on all things USD, just cast another round of shade at bitcoin. Are the biting comments far too bold to be fair, though?
Sec. Mnuchin, who in a press conference last week called cryptocurrencies like bitcoin a “national security threat,” made his latest anti-BTC remarks in an early June 24th interview on the CNBC “Squawk Box” program.
When asked whether he’d be talking about or owning bitcoin in the coming years, U.S. President Trump’s foremost economic adviser derided the idea:
“I won’t be talking about bitcoin in 10 years, I can assure you that […] I would bet even in five or six years I’m no longer talking about bitcoin as treasury secretary, I’ll have other priorities […] I can assure you I will personally not be loaded up on bitcoin.”
To be sure, Mnuchin will most certainly have many non-cryptocurrency priorities in the years ahead. But if the bitcoin price is anywhere above its current position of $10,000 USD one decade from now, it will have have been worth the secretary of the treasury’s time to have paid closer attention — in more ways than one.
— Squawk Box (@SquawkCNBC) July 24, 2019
During the same CNBC interview, the Treasury Secretary pushed back against the notion he had a “weak dollar policy,” arguing that
“I think the dollar is the reserve currency in the world. It’s in our interest. We want to maintain it […] Right now there is a lot of people who want to invest in the U.S. and that creates a lot of demand for dollars.”
Sec. Mnuchin’s latest characterization of bitcoin as non-viable echoes comments President Trump notably made earlier this month in a tweetstorm where he bashed cryptocurrencies, characterizing them as non-money that are hotbeds for criminal activity.
“I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air,” the president wrote at the time.
As far as the aforementioned criminality angle goes, it’s an ironic and unnuanced position for the president to make, seeing as how U.S. dollars underpin an untold number of crimes across the globe day in and day out. No one likes that, but that’s the nature of money.
Sec. Mnuchin himself argued last week that dollars weren’t commonly used in criminal transactions, an incorrect assertion made much to the chagrin of many cryptoeconomy stakeholders.
Is the Secretary Making A Bad Bet?
When Sec. Mnuchin says he won’t be holding bitcoin in a decade, he’s implicitly making two suggestions.
The first is that he doesn’t think bitcoin will survive in any meaningful way going forward. The second is his belief the dollar will remain dominant enough that he won’t have to care about BTC even if it does survive.
Perhaps the top USD defender should zoom out a tad, though.
Even if it takes bitcoin price the next 10 years to hit its all-time high of $20,000 again, that would mark a triumph far greater than what the current secretary of the treasury has seemingly suggested is possible for the cryptocurrency.
Another angle to consider is this: President Trump has recently been openly lobbying for the Federal Reserve, America’s central banking system, to print more USD to keep up with the “big currency manipulation game” he argues China and the European Union are undertaking with their fiat currencies.
It’s not that the president’s vision will win out here unrestrained. But if the dollar keeps up its inflationary trajectory and that trajectory continues to steepen, then bitcoin may continue to gain attention as a deflationary safe haven asset that has, at least to date, been generally uncorrelated with the performance of mainstream financial instruments.