Markets May Not Know How to Handle Trump Scandals but Bitcoin Booms
At the risk of being cliche at this point, the past week has been a wild one. Following the firing of FBI director James Comey, news of a special prosecutor being named to investigate Russia’s potential influence on the 2016 presidential election, and a series of leaks that have some (perhaps prematurely) whispering “impeachment,” President Donald Trump has had his hands full of scandal. As a result stock markets have seen ups and downs with some worrying that tax breaks and other economic boosters may never come if the Commander in Chief is consistently embroiled in controversy. However, even as the dollar has weakened slightly, another type of currency is exploding: BitCoin.
According to CNN Money the price of BitCoin exceeded $2,000 for the first time ever over the weekend and, as of this writing, is trading above $2,200. TechCrunch notes that’s up more than 50% from a previous record high of $1,343 the coin reached on April 28th of this year and up 125% so far in 2017. The site also reports that Bitcoin total market cap is now over $32.92 billion.
If you’re unfamiliar, Bitcoin is the world’s most popular cryptocurrency and is accepted by such businesses as Expedia, Virgin Galactic, Microsoft and more. That said it’s not the only such currency and others are also on the rise. Namely Ethereum and Ripple have also seen surges in recent weeks.
The biggest reason that these cryptocurrencies have seen such massive gains as of late is because they’re not backed by any governments. Of course, if you’re not so into these fancy digital currencies, gold provides many of the same protections from a falling dollar. As you’ve probably guessed by now, the price of gold is on the rise as well. Plus, even with the recent growth of various cryptocurrencies, all of them combined still wouldn’t amount to 1% of the world’s gold reserves.
Incidentally Bitcoin and other cryptocurrencies actual have a fair amount of support in the White House. For example, Vice President Mike Pence’s chief economist Mark Calabria (formerly of the Cato Institute) has spoken about Bitcoin in the past. In an interview conducted before his days in the administration, Calabria said, “While I’m an economist, not a tech guy, I’m very excited about Bitcoin, as I am about alternative currencies in general, and perhaps even more interested in the blockchain.” Additionally Callabria retweeted a Bloomberg article last year declaring “Bitcoin isn’t anonymous enough” — a charge that many opponents of cryptocurrencies would certainly balk at.
So while it’s unclear what will happen with markets, the dollar, and the U.S. economy overall after a wild week at the White House, it’s apparent that many are taking an interest in other forms of currency. This is especially true with so-called cryptocurrencies that aren’t tied to any government the way traditional currencies are but also rings true for more proven commodities like gold. Once again, in these interesting times, it seems many are looking for something they feel they can rely on to be at least a little bit more predictable.