Can Donald Trump Ban Bitcoin and Cryptocurrencies?

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Eimantas Žemaitis

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Eimantas Žemaitis

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Eimantas is a copywriter, Bitcoin and crypto journalist, and a life-long media student with a strong drive to explore the intersection between all forms of media, money, marketing, education, and the...

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June 26, 2023 06:54 EDT

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The President of the United States, Donald Trump, can theoretically go after Bitcoin and cryptocurrencies but in reality, such a ban is highly unlikely, according to a recent discussion in the cryptoland.

The discussion was sparked by the Trump’s tweetstorm where he expressed distaste for Bitcoin, Libra, and other competitors of the United States dollar. Besides, some members of the U.S. congress have already drafted a “Keep Big Tech Out of Finance” bill, which is intended to prevent the creation of Facebook’s new cryptocurrency.

Meanwhile, according to economist and trader Alex Krüger, the United States Constitution protects Bitcoin code as it is a form of free speech which is protected by the First Amendment. As a result, making Bitcoin illegal is equal to banning free speech and thus is unconstitutional.

However, the regulators have all the power to “protect” investors from dealing in bitcoin marketplaces by targeting and isolating fiat onramps for retail and institutional investors. It would serve to remove most liquidity out of the local bitcoin markets.

Alternatively, Trump could issue an executive order banning U.S. citizens from dealing in bitcoin, much like he did with the Venezuelan Petro cryptocurrency. Such a ban could be motivated by an “attempt to circumvent U.S. sanctions and would be similar to the “hoarding of gold” executive order of 1933.

Besides, Trump can go after fiat-to-crypto exchanges by simply forbidding banks to serve them. Moreover, some of the U.S. banks already do so.

In sum, a full-blown ban on Bitcoin and cryptocurrencies in the U.S. is possible in theory but highly unlikely. Moreover, it might mean that Trump could lose millions of his supporters. However, if it does happen, Krüger predicts a rapid and immense bitcoin market crash.

Kruger is not the only skeptic of the U.S. crypto ban. According to George McDonaugh, the CEO and co-founder of the investment firm KR1, Trump remarks on Bitcoin are simply wrong.

“Imagine giving Donald Trump a money printing machine and then asking him kindly not to use it. My thoughts exactly… This is why the U.S. economy is 22 trillion in debt and why the average lifespan of a government backed fiat currency is 27 years. There will be a reckoning, and when it comes it will be something like bitcoin that comes to the rescue.”

Other Twitter users seem to share similar sentiments.

The U.S. government and regulatory sanctions from other countries aren’t the only threats to Bitcoin, as there are other theoretical scenarios which could potentially kill Bitcoin.
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Ever since Trump comments on Bitcoin and cryptocurrency, the crypto market is experiencing a correction as bitcoin retested the USD 10,000 support level. However, majority of analysts agree that it has nothing to with Trump remarks. Moreover, bitcoin price increased right after the tweetstorm by the President.