On September 17, just as people were waiting for the Federal Reserve to resume interest rate cuts on September 18 and use the dollar's status as a reserve currency to establish a new round of monetary harvesting cycle, the latest news about countering the Federal Reserve's monetary system came out in the United States.
According to reports, Trump and his son released new details about their new cryptocurrency platform World Liberty Financial on the evening of September 16, which happened more than a dozen hours after Trump's second assassination attempt. It also marks Trump's latest embrace of digital currency after years of skepticism about cryptocurrencies. Trump is also creating a gimmick of reverse harvesting the Federal Reserve at lightning speed.
Trump appeared in an X Spaces conversation that day, which was advertised as the "crypto address status" for the launch of the project. According to people familiar with the matter, Trump had previously discussed cryptocurrency policy with the world's richest man, Elon Musk. The guest of the conversation was cryptocurrency investor Farokh Sarmad, who interviewed Trump, his sons Eric Trump and Donald Trump Jr., and other business allies at Trump's Palm Beach Mar-a-Lago estate to discuss new businesses and the broader cryptocurrency industry.
It is worth noting that when Trump talked about the development of cryptocurrency in the United States, he actually talked about the renminbi and its surroundings. He said, "If we don't do it, China will do it," "China will do it anyway. But if we don't do it, we won't be the biggest, and we have to be the biggest and the best." Earlier this year, Trump called for all remaining Bitcoins to be mined in the United States, saying that this could be the "last line of defense" against central bank digital currencies (CBDCs). The U.S. Capitol Hill reported that currently, the world's largest CBDC pilot project is led by China.
However, it should be noted that CBDC is a form of digital currency based on sovereign endorsement by central banks around the world, which is fundamentally different from the cryptocurrency without sovereign endorsement mentioned by Trump. In other words, Trump seems to have replaced the concepts of central bank digital currency and digital currency without sovereign endorsement.
While not offering many specific details about the project, Trump described cryptocurrency as an "infancy" and said it was a "huge business" that had a "chance to be something really special." "Barron knows a lot about it," Trump said of his youngest son, 18. "He talks about his wallets. He has four wallets. He knows about these things."
Trump said he was not "overly interested" in cryptocurrencies initially until his trademark non-fungible tokens were paid for in cryptocurrencies. The kids "opened my eyes," he said. Interestingly, in July of this year, shortly after Trump's first assassination attempt this year, he said in a speech that if he could return to the White House, he would ensure that the U.S. federal government retains 100% of its Bitcoin and will list it as a U.S. strategic reserve asset. "I will develop my plan to ensure that the United States becomes the cryptocurrency capital and Bitcoin superpower on the planet, and we will get it done," Trump said.
"I will fire SEC Chairman Gensler on the first day of my election." It is reported that Gensler has taken a positive attitude towards cryptocurrency regulation. Combined with the latest developments, it can be seen that Trump's attitude towards cryptocurrency is undergoing a 180-degree reversal, which also reflects that cryptocurrency users seem to have become a growing force in the US election process.
You should know that in Trump's last term, he had been strongly opposed and attacked cryptocurrencies, and he declared that cryptocurrencies "are not currencies." In 2019, Trump wrote on the social platform: "The United States has only one real currency, and it is stronger than ever. It's called the US dollar!"
That is to say, similar to the Fed's public ideas, Trump believed a few years ago that only US dollar banknotes could maintain the United States' economic and trade status. In particular, so-called "currencies" such as Bitcoin, which have no sovereign endorsement and no anchor, are the world's largest Ponzi scheme. Analysts believe that the latest showdown and reversal of cryptocurrencies during this election is deeply motivated by the desire to gain more support from cryptocurrency participants. Since May this year, the Trump campaign has received donations in various cryptocurrencies from at least 12 states. David Bailey, CEO of a cryptocurrency company, promised to raise $100 million in donations for Trump and mobilize more than 5 million voters to support Trump.
Trump said that the Biden-Harris administration's attitude towards cryptocurrencies is wrong, which is very unfavorable to the United States. In response, some Democrats have panicked and sent letters to the Democratic National Committee, saying that more than 52 million Americans have accepted digital assets, a figure that could be a powerful booster for Trump to eventually win the election in November.
Not only that, Senator Cynthia Lummis of Wyoming, a staunch Trump supporter, reiterated Trump’s promise three weeks ago to use the 210,000 bitcoins already held by the U.S. federal government to start the reserve, saying the goal is to “put it into a reserve stored in vaults in different geographical locations.” Lummis shared, “Within five years, the United States will gather 1,000,000 bitcoins, 5% of the world’s supply, and will hold them for at least 20 years for one purpose: to reduce our debt.”
Loomis declared, "With the strategic reserve of Bitcoin, we will have an asset that can reduce our debt in half in the period before 2045." As of September 17, the total national debt of the United States was approximately 35.4 trillion US dollars, an all-time high. Since the 1980s, the total federal debt has doubled every eight years on average. According to this law, it means that the total national debt of the United States may rise to 200 trillion US dollars in 2045.
This means that, assuming Trump can return to the White House, the United States may be able to repay at least $100 trillion in debt in the future by raising the value of Bitcoin. This plan is likely to be included in Trump's 2025 agenda and approved by Congress to become a future law in the United States. However, this cryptocurrency is not on the same level as the sovereign cryptocurrencies of many central banks around the world because it has no sovereign endorsement. In other words, the United States' attempt to repay debts through Bitcoin can also be regarded by the market as an indirect Ponzi scheme of default.
Loomis then referred to an earlier speech by Microstrategy Executive Chairman Michael Saylor, who said that if we buy $3.3 million worth of Bitcoin as a U.S. strategic reserve, it could actually pay off our entire national debt over time. In other words, there is a possibility that the United States will use non-sovereign cryptocurrencies to pay off debts in the future and stage a Ponzi scheme.
Not only that, Samson Mow, a well-known cryptocurrency advocate, proposed to Trump to deeply bind Bitcoin to the US economy, saying that US Treasury bonds can be converted into the smallest unit of Bitcoin, "Satoshi", that is, 1 US dollar equals 1 satoshi. This idea aims to integrate Bitcoin into the traditional financial system. This may reduce the burden of US debt management.
Samson Mow also suggested that Trump abolish the Federal Reserve, a move that would completely change the monetary policy of the United States. The idea stems from the belief that a decentralized system like cryptocurrency can better serve as a store of value and a medium of exchange. He added that the recent interest rate cuts by many central banks are increasing global liquidity. The Federal Reserve is about to start cutting interest rates on September 18, which has also stimulated optimism in cryptocurrencies. More importantly, the rising national debt of the United States has further intensified people's interest in alternative, non-dollar-centric assets such as cryptocurrencies. Mow further said, "The tipping point is getting closer and closer."
The above signs further indicate that cryptocurrencies are becoming a "tool" for hyping up the storm of the US election. However, this is still very different from the sovereign cryptocurrencies of central banks in many countries around the world.
In fact, according to Russian media reports last month, 159 countries are ready to use a BRICS digital payment system called BRICS Pay, which will bypass the dollar-dominated SWIFT payment system and thus avoid the Federal Reserve's harvesting model under different monetary cycles.
In fact, not only the BRICS countries have laid out CBDC in advance, but even many traditional allies of the United States are also going further and further on the road of in-depth development of CBDC. For example, the central banks of Japan, the United Kingdom, and Canada have jointly established a group with the European Central Bank and the Swiss National Bank to jointly develop sovereign cryptocurrencies a few months ago to carry out regional trade and economic cooperation that avoids the centralization of the US dollar. At the same time, Israel has also been continuously developing CBDC backed by diamond resources.
This shows that many traditional allies of the United States, including Japan, Britain, Canada, Germany, France, Italy, Israel, and Switzerland, which claims to be a "neutral country", are collectively using sovereign cryptocurrencies and following Trump's fight against the Federal Reserve and the US dollar monetary system.
This also reflects that the Federal Reserve has been using monetary tightening and loosening in different periods to create various harvesting dramas around the world for many years, which is becoming increasingly unpopular. On the other hand, because the Federal Reserve and the White House have been lagging behind in developing the US dollar CBDC in order to maintain the status of the US dollar as the king of currencies, many traditional allies of the United States, such as Japan and Israel, can collectively reverse harvest the US market through sovereign cryptocurrencies and other means.
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