For bitcoin proponents, Trump's critiques come as a sign of validation

The president’s comments come amid a strong run for bitcoin and the cryptocurrency industry that has included rising prices.
People pass in front of a Bitcoin exchange
People pass in front of a Bitcoin exchange shop in Krakow, Poland on April 4, 2018.Artur Widak / NurPhoto via Getty Images file

Breaking News Emails

Get breaking news alerts and special reports. The news and stories that matter, delivered weekday mornings.
SUBSCRIBE
By Alyssa Newcomb

Most industries fear a negative tweet from President Donald Trump, who has been known to move markets when he decides to single out a particular company, executive or product.

But not the cryptocurrency community.

Bitcoin proponents broadly celebrated after the president tweeted Thursday that he is “not a fan” of bitcoin and other digital currencies, a statement that also came as something of a surprise after some Trump associates have previously expressed approval or admiration for cryptocurrencies.

The president’s comments come amid a strong run for bitcoin and the cryptocurrency industry that has included rising prices, broader discussion in Washington, D.C., and a rare stamp of approval from the Securities and Exchange Commission.

Bitcoin is one of many cryptocurrencies that have been created in recent years using a concept known as blockchain, a system in which computers form a network to contribute to a shared ledger. Blockchain proponents boast that these systems eliminate the need for central authorities such as banks, allowing for the secure exchange of digital credits, as well as other services such as contracts.

Bitcoin’s price, which has surged over the past month. was up more than 2 percent Friday to $11,636 after the president’s tweets.

“Achievement unlocked! I dreamt about a sitting U.S. president needing to respond to growing cryptocurrency usage years ago,” Brian Armstrong, CEO of Coinbase, a digital currency exchange, tweeted.

Byers Market Newsletter

Get breaking news and insider analysis on the rapidly changing world of media and technology right to your inbox.

David Mass, chief financial officer at VisionX, a blockchain company, said Trump was providing free publicity simply by talking about cryptocurrency.

“While he may have a negative bias, it’s quite clear this is a bullish indicator, as high profile people are now increasingly becoming aware of fast-tracked blockchain adoption,” Mass told NBC News.

Trump’s comments came shortly after he hosted an event at the White House at which he welcomed an array of far-right conspiracy theorists and agitators as part of an effort to push back against the perceived bias of major tech companies, including Facebook, which is working to launch a new cryptocurrency called Libra.

Trump also took aim at Facebook’s plan to launch its Libra cryptocurrency in 2020 and suggested the currency will need to be regulated just like banks. Libra will “have little standing or dependability,” he added.

Trump’s tweet was sent one day after Federal Reserve Chairman Jerome Powell told the House Financial Services Committee that he’s concerned about Libra.

"While the project's sponsors hold out the possibility of public benefits, including improved financial access for consumers, Libra raises many serious concerns regarding privacy, money laundering, consumer protection and financial stability," he said. "These are concerns that should be thoroughly and publicly addressed before proceeding."

The cryptocurrency community is used to skepticism, often regarding it as vindication that the technology can no longer be ignored and is an inevitable evolution of global finance. A critique for a sitting president is just a new high.

Peter McCormack, host of the “What Bitcoin Did” podcast, also shared the sentiment.

The skepticism from Trump and Powell overshadowed an important step for the legitimacy of the blockchain industry. On Wednesday, crypto startup Blockstack became the first company to win approval from the SEC to sell blockchain-based tokens to investors, an alternative way of raising money from the public to fund a business.

Trump’s comments came as something of a surprise. Before Thursday, the president had not yet commented on the technology, which has had some support among people close to him.

Last year, Steve Bannon, former White House chief strategist, said that digital currencies “are the future.” The president’s acting chief of staff, Mick Mulvaney, has been vocal about his support of cryptocurrency and the benefits of blockchain.

Pro or con, Balaki Srinivasan, an angel investor and the former chief technology officer of Coinbase, tweeted that it took 10 years for cryptocurrency advocates to reach this point.

“The tone almost doesn't matter,” he said. “Ten years hence, this will be routine. Every nation state may have to hold crypto.”