Bitcoin was back in the news this week after a spell dominated by Facebook’s Libra token, which hasn’t totally gone away. However, the impact of the rising geopolitical tensions on Bitcoin’s price has come under scrutiny for the first time, which makes interesting reading. Let’s see what the press made of it all, and how misinformed they were this time round
There’s a definite sense of irony that Bitcoin is mentioned in an article that contains the words ‘safety first’, or perhaps this is simply an indication of the parlous state the world economy is in. The New York Times gets its dig in by saying that “and even Bitcoin” is among the alternative assets that investors worldwide are looking for “as anxiety grows about trade wars, U.S.-Iran tensions and negative interest rates.”
The Guardian initially puts Bitcoin’s recent run down to the Facebook effect, citing a financial trading analyst as saying “Bitcoin has slowly – by its own standards – been rising in recent months but the launch of Facebook’s Libra has clearly been a catalyst for the recent surge.” Clearly. Geopolitics do come into it later however, with the newspaper stating that “Rising tensions in the Middle East and mounting fears about the world economy have also stoked renewed interest among investors in bitcoin…”
Much to the mainstream media’s chagrin, Bitcoin is clearly taking taking its place at the table as a legitimate financial asset, and it will be interesting to see how long they remain so firmly against it.
Sticking with The Guardian, they had clearly had enough of Bitcoin’s resurgence and tried to think of new ways in which to bring it down. What better way than to review a book about the Bitcoin whitepaper? The “review”, which rarely strays into the territory of discussing the book itself in favour of bashing the concept of Bitcoin as usual, gets its facts in a twist early – it states that Wikileaks refused to use Bitcoin, when in fact a payment channel was opened between the two in June 2011.
The next confusing statement is that Bitcoin mining is concentrated in the hands of the few that have the requisite “computer power and maths skills”. What maths skills has to do with it is as baffling as it is wrong. Naturally they cite Nouriel Roubini, their usual go-to-critic when it comes to all things crypto, which tells you all you need to know about where their loyalties lie.
The Associated Press reported this week that Randal K. Quarles, the chief of the Financial Stability Board, has called for “close scrutiny” of cryptocurrencies in the wake of, yes you guessed it, the announcement of Facebook’s Libra token. Quarles made the statement in a letter to the heads of state and government who will gather at the G20 summit on June 28-29 in Osaka, Japan, where the subject of cryptocurrencies was due to be discussed anyway, regardless of the Facebook announcement.
However, Libra has taken the heat off cryptocurrencies like Bitcoin due to having a ready made user base in the billions the report states, whereas “cryptocurrencies such as Bitcoin were not considered a threat to financial stability because the amounts of money involved were tiny compared to the size of the global financial system.”
That’s it for this week’s crypto in the news – if Bitcoin can crack all time highs this week there will be no guessing what we’ll see next week!