The U.S. Commodity Futures Trading Commission (CFTC) made history in December 2017 for being the first major regulator in the world to formally greenlight bitcoin futures products. Now we know there was more to the approval than was previously known.
In comments made to CoinDesk and during a presentation at the San Francisco-based Pantera Summit this week, former CFTC Chairman J. Christopher Giancarlo said top bodies within the Trump organization, including the U.S. Treasury and the National Economic Council, thought futures products could counteract the 2017 bitcoin bubble, which pushed the BTC price tag to $20,000 USD at its peak.
Giancarlo, who was popularly dubbed “Crypto Dad” after revealing his children were bitcoin fans during a congressional hearing in 2018, recounted the anecdote as such:
“One of the untold stories of the past few years is that the CFTC, the Treasury, the SEC and the NEC director at the time, Gary Cohn, believed that the launch of bitcoin futures would have the impact of popping the bitcoin bubble. And it worked.”
The former CFTC head noted those various federal organizations thought a financial crisis was potentially in the making as the bitcoin price went on a feverish price run in 2017, namely because there were no major shorting mechanisms around BTC at the time.
Futures contracts, which allow investors to bet on the price of a given asset, were thus seen as one way to “bring discipline” to an overly optimistic market.
“We saw a bubble building and we thought the best way to address it was to allow the market to interact with it,” Giancarlo said.
The former regulator had previously made waves last week in co-authoring a Wall Street Journal op-ed in which he called for the U.S. dollar to be transitioned onto blockchain technology to allow USD to “compete confidently in the new digital era.”
President Trump Personally No Fan of Bitcoin
While ex-CFTC Chairman Giancarlo and his colleagues were acting in their professional capacities and with the public’s well being in mind when they tried to discipline the bitcoin market, their boss — current U.S. President Donald Trump — generated considerable buzz earlier this year when he blasted bitcoin and cryptocurrencies in a series of personal remarks.
The comments came on the heels of the Facebook Libra stablecoin project announcement, which apparently led President Trump to publicly opine on these fledgling assets for the first time in a scathing Twitter thread.
“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,” he said.
….Similarly, Facebook Libra’s “virtual currency” will have little standing or dependability. If Facebook and other companies want to become a bank, they must seek a new Banking Charter and become subject to all Banking Regulations, just like other Banks, both National…
— Donald J. Trump (@realDonaldTrump) July 12, 2019
The president went on to argue that the U.S. dollar is and would always be the reigning world currency:
“We have only one real currency in the USA, and it is stronger than ever, both dependable and reliable. It is by far the most dominant currency anywhere in the World, and it will always stay that way. It is called the United States Dollar!”
So while there is no indication that President Trump directly ordered U.S. officials to clamp down on bitcoin in 2017, it is no longer a mystery where he personally stands on the cryptocurrency.
Of course, before those July remarks some in the cryptoverse thought the businessman turned controversial politico might be a bitcoin fan in waiting if only BTC could simply capture his attention.
It’s clear now, though, that Trump’s monetary style couldn’t be farther from Bitcoin’s neutral, deflationary model. The president has recently been calling for the Federal Reserve to inflate the U.S. dollar in order to keep up with the “currency manipulation game” he has alleged Europe and China have been “playing.”