Bitcoin
Donald Trump calls Bitcoin a “scam on the dollar”
- By Mary-Ann Russon
- Business Reporter, BBC News
June 8, 2021
Image source, Getty Images
Former US President Donald Trump told Fox Business that he views Bitcoin as a “fraud” that is hurting the value of the US dollar.
“Bitcoin, it just looks like a scam,” Mr. Trump said. “I don’t like it because it’s another currency competing with the dollar.”
He added that he wanted the dollar to be “the currency of the world.”
The price of Bitcoin has been falling steadily since early May and has yet to recover.
Is Bitcoin Really a Threat to Currency? Here’s What the Experts We Spoke to Think
‘Bitcoin is a threat to all major currencies’
Justin Urquhart-Stewart, co-founder of Seven Investment Management and investment platform Regionally, believes Bitcoin poses a potential threat to destabilize currencies “because it has taken off in such a way that it has created mainstream appeal without any solid financial foundation.”
Image source, Getty Images
Image caption: People enjoy themselves at the Bitcoin Convention 2021, a cryptocurrency conference in Miami this week.
He attributes Bitcoin’s rise to figures like Elon Musk who “behave stupidly” which makes the general public perceive the cryptocurrency as trustworthy.
“Bitcoin is dangerous because it tries to create a level of credibility for a value that is unreliable and completely unfounded,” he tells the BBC.
“Oftentimes, inexperienced gamblers get drawn at the wrong time into something they think can make them a quick buck. To them, no matter what it is, whether it’s Bitcoin, GameStop or AMC, it’s something you can bet on.”
He says there is a growing trend of young people who have some knowledge of technology, “like amateur technologists”, who are taking big risks because they have not been properly educated about finance.
Mr Urquhart-Stewart strongly believes that the national curriculum should include education on how to develop family finances across generations.
“What we have now is a young generation of gamblers who have no knowledge of financial planning and development,” emphasises Mr Urquhart-Stewart.
“They understand how to buy and sell things, but they have no idea how to create long-term wealth.”
No threat to the dollar
In contrast, Neil Wilson, chief market analyst at Markets.com, believes that Bitcoin is definitely not a currency.
Image caption: Mr Wilson says Bitcoin could pose little threat to gold as people shift their investment allocations from precious metals to cryptocurrencies
He says that to qualify as a currency, it must have the following functions:
- A unit of account
- Provide a good stock of value
- Be a means of payment
“I call Bitcoin more of a security, like a stock or a bond,” says Mr. Wilson.
“Although it has a huge valuation, it is too volatile to be a currency. It fluctuates more than most stocks.”
He says that with Bitcoin, people are buying it primarily to hold and invest, rather than spend it frequently.
And as for Mr. Trump’s claim that cryptocurrency is threatening the U.S. dollar, he disagrees, although it may pose little threat to gold.
“The way the United States exerts influence over the world is predominantly through the dollar, and they’re not going to give that up, so I don’t see Bitcoin as a threat at all,” he says.
“Governments don’t like other people creating money. They seem to have tolerated cryptocurrencies for a while now, but eventually they will establish their own digital currencies and push Bitcoin to the sidelines.”