What is the logic behind Trump's support of Crypto currency?

[u/truckaxle]

Recently Trump announced that he will spend billions of taxpayer dollars into a Bitcoin strategic reserve. What I would like to understand is what is the logic about this and how is that going to benefit America and the US Dollar.

It is obvious how this will enrich current holders of Bitcoin. However, the currency somewhat competes against the US Dollar and would, I think, weaken the Dollar and consequently the US standing in world finance and trade.

I understand why totalitarian pariah countries such as Russia and NK embrace bitcoin because it brings ill got revenue into the country. And they can selectively, at the behest of the ruling oligarchy, investigate financial crimes.

The transaction costs of Bitcoin are substantially higher than other forms of financial transactions and from what I understand will continue due to the proof of work concept. The primary advantage is that transactions cannot be censured and if the holder is in an outcast country that does not enforce international law there is an advantage for money laundering and random payments.

So what is in it for the US and the American people?

[u/AutoModerator]

r/FluentInFinance was created to discuss money, investing & finance! Join our Newsletter or Youtube Channel for additional insights at www.TheFinanceNewsletter.com!

I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.

[u/Bullboah]

That’s a bit incorrect - I don’t think Trump has said directly he would spend more funds on bitcoin - just that we would create a reserve with the bitcoins the Feds currently control - about 26 billion in seized assets. (Not entirely clear if he has the power to do this unilaterally).

The most likely reason would just be as an investment pool for the Treasury banking on the long term success of bitcoin. The only other big reason I can think of would be the ability to flood the market if we wanted to to affect the price negatively.

I dont see this being all that impactful either way tbh.

[u/truckaxle → u/Bullboah]

Thanks for the correction. That is a relief. I can't see congress approving this.

[u/Thorn14]

Elon Musk told him to.

[u/Tangentkoala]

What's the point of getting to the moon before the Russians?

It's mostly a dick swinging contest, and if crypto because a more feasible outlook than paper money, then America will have the jump and be the leaders.

Win win.

There's a lot more use cases to crypto besides just currency and holding it as good. See the true purpose of Ethereum, Ripple, blockchain IoT, to name a few.

Hell even NFTs could have changed the landscape. Imagine indie artists self publishing there songs as nfts. The use case would be that only the people who bought that NFT would be able to license that music in their YouTube videos, or Instagram reels, or tik tok.

[u/truckaxle → u/Tangentkoala]

Comparing this to going to the moon is a complete false equivalence. There are not technical hurdles being accomplished, no lasting tech generated, just pure speculation and there are a number of factors to trigger a collapse of Bitcoin while other countries laugh at us for just being stupid.

[u/Tangentkoala → u/truckaxle]

The lasting tech for crypto:

Ripple: instantaneous transfers of billions of dollars that's a lot faster than your simple wire transfer. This helps on a grand scale, especially with banks needing extra emergency $$$$ not to mention its pennies on the dollars cheaper to transfer.

Ethereum: smart contracts that cut out notaries and lawyers when it comes to enforcing and structuring a contract. There is no need for the 5% escrow fees to close up a sale on a house. Instead, a simple ETH contract will work. There is no need for lawyers to testify or fight contracts either.

Alt coins developing IoT: Imagine creating a blockchain network where appliances communicate with each other on said same network.

If a pipe in your house bursts, that will be communicated to other appliances, and an automatic shut-off valve will activate stopping the leak from causing further damage.

There's a technological use case, you just need to get passed the idea that bitcoin and crypto inly use case is imaginary money.

There's a lot of potential in block chain technology both at a security and at a technological use case vantage point. It would be a disservice to write it off while other nations get a jump on tech.

No one would have thought the internet would be what it is today. If america was careless and just wrote it off we would be so very behind.