Law enforcement authorities can shut down bitcoin anytime, according to Bloomberg Digital’s executive editor Joe Weisenthal.
The media talent warned institutions against creating bitcoin-based investment products, stating that they could become a tool to take capital from fiat markets. Citing Bitcoin exchange-traded funds, Weisenthal said no regulators would want to approve fiat onramps to pump money into the bitcoin ecosystem. First, the move would make fiat unattractive to investors. And second, it would increase the amount of illicit financial transactions.
Weisenthal thinks bitcoin has only one critical use case: to facilitate trades that the governments and regulators – or “the MAN” – do not want anyone to make. That makes the cryptocurrency an ideal tool designed to serve criminals – and criminals only. Creating new markets to inject more into bitcoin, therefore, would increase the number of financial crimes. So, one way or another, an average law enforcement agency would attempt to get rid of bitcoin once and all.
“If you’re building or launching these institutionally-grade products, how sure are you that down the road regulators won’t come in and shut it all down,” questioned Weisenthal. “There is so much interest in this space, but is anyone thinking this through?”
The Man Will Come After Big Bitcoiners?
The statements were a part of a newsletter that showcased bitcoin as an ecosystem run by two kinds of users: speculators and transactors. Weisenthal said the bitcoin protocol works when certain people expect more massive profits out of their so-called bitcoin investments – or when they use bitcoin to conduct transactions away from the prying eyes of regulators. Both kinds of users, wrote Weisenthal, compliment each other.
In today's @Markets newsletter, I wrote about how the point of Bitcoin is do to the transactions that THE MAN doesn't want you to do (including illegal transactions). And the allowance of a Bitcoin ETFs would essentially be a big subsidy to this market https://t.co/e5TYtjIuOw pic.twitter.com/fkMbexuv8v
— Joe Weisenthal (@TheStalwart) October 17, 2019
The introduction of Wall Street-level products, meanwhile, would boost the number in both kinds: speculators and transactors. Weisenthal added:
“If you’re in the business of creating institutional onramps to crypto, you have to be cognizant of the risk that one day regulators wake up and ask: Wait, why did we provide a gateway to provide liquidity into [the] space whose express purpose is to let people evade The Man?”
The Bitcoin Community’s Response
“This is wildly inaccurate,” replied Anthony Pompliano, co-founder and partner at Morgan Creek Digital Assets, about Weisenthal’s assessment. He added:
“You’re claiming that non-censorship is the only value prop of Bitcoin. What about the non-seizure element? What about the disinflationary monetary supply? Or the sound money element? Or pseudonymity? Please stop writing nonsense & misinformation.”
Larry Cermak of the Block, meanwhile, agreed with Weisenthal, differing only with one point about the “types of bitcoin investors.”
“I would say that there is a third (small) group of people that buy bitcoin (or dollars/dai if it’s available) to hedge against the government’s corruption and inflation. I wouldn’t classify these people as speculators. But I agree with everything else.”