Bitcoin has been booming in part because of the digital gold narrative, among many other key factors. However, a veteran trader is reminding crypto holders of an old US Executive Order banning gold, warning that it could very well happen again, but with Bitcoin. Are they just trolling, or is there truth to the claim?
Here’s everything you need to know about Executive Order #6102, why it is unlikely to happen again, but also why it is something every crypto investor should be aware of.
Bitcoin Becomes Digital Gold Post-Pandemic
Bitcoin has exploded back into the limelight after three years of a bear market. This bull market has already taken Bitcoin from under $4,000 to nearly $60,000 and over a $1 trillion market cap.
Although the cryptocurrency is primarily a speculative asset at this time that’s difficult to assign a value to, some analysts put the price per Bitcoin as high as $400,000 and beyond in the future.
As the cryptocurrency’s market cap grows and beats major publicly traded company after company, even rising the ranks of total currencies globally, it becomes even more so a viable challenger to gold and to the dollar.
Bitcoin is now trouncing gold with its better, faster, more secure, all-digital narrative, but it is still a far ways off from facing squarely off with the dollar as the global reserve asset.
Gold's value has been diminishing while Bitcoin's rises. Coincidence? | Source: BTCUSD on TradingView.com
At one point in time, when the dollar was at its weakest and the nation of the United States was in crisis. Then US US President Franklin D. Roosevelt signed into law an Executive Order “forbidding the hoarding of gold coin, gold bullion, and gold certificates,” in the country.
The action, put into law in April 1933, involved a “penalty of $10,000 and/or up to five to ten years imprisonment,” if discovered holding more than the allowed allocation of $100 in gold coins or up to five troy ounces of gold.
At the time, the US was dealing with the Great Depression and to combat economic challenges, investors flocked to the safe haven asset. Sound familiar?
Career commodities trader Peter Brandt today warned crypto investors that the same could theoretically happen to Bitcoin – an asset in which he holds and often comments on. And while in theory this is true, things are very different than they were back then.
Executive Order #6102 — Action by a progressive U.S. president during a time of a national crisis
Been done before
Any U.S. citizen who thinks it can't be done again better think twice – but this time not with Gold pic.twitter.com/OA95G3lxB9
— Peter Brandt (@PeterLBrandt) February 21, 2021
At the time, the United States government had significantly more control over its citizens than it currently does, thanks to decentralization and the internet. Individual wealth is very different today, and the wealth controlling all of the capital in Bitcoin has a lot more say than the private individual investor did during The Great Depression.
That’s not to say it is impossible, but banning it outright for citizens of the United States while the asset flourishes globally will only serve to restrict the country’s economic growth, not save it.
Related Reading | Here’s How High Bitcoin Could Go If 2017 Repeats
And perhaps the most important benefit of Bitcoin of all, because it lacks a physical form, confiscation would need to be voluntary or would otherwise be impossible.
An Executive Order of this magnitude is not impossible, but even Brandt himself appears to be only having some fun and trolling the speculators holding the cryptocurrency currently.
Featured image from Deposit Photos, Charts from TradingView.com