Started by Bitcoin, Nov 05, 2022, 03:12 am
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The new English prime minister could spark interest in bitcoin within a country that desperately needs it.
This is an opinion editorial by Jacob Kozhipatt, a YouTuber and writer.
The phrase “October Surprise” is used in politics to describe a last minute, paradigm-shifting event that occurs a month before an American election. For example, in 2016, the FBI reopened their investigation into Hillary Clinton’s private email server, an event which many argue led to her loss in the 2020 election. In 2020, then-president Donald Trump contracted COVID-19, just weeks before the November election.
Bitcoin markets are in need of a shakeup. 2022 has been a tough year for the price of bitcoin. Right now, bitcoin sits ~65% below its price just one year ago, a far cry from the six-figure price prediction that models like “stock-to-flow” and long-time bulls, like Tim Draper, predicted.
Some hope that the appointment of England’s new cryptocurrency-friendly Prime Minister, Rishi Sunak, could be a major positive change. Sunak, considered by many to be an ally of innovation, declared a year ago that he wished that the United Kingdom would become a “global hub for crypto-asset technology.”
Can Rishi Sunak’s election be the necessary “October Surprise” to push bitcoin forward?
One of the most important questions going forward with bitcoin is: How should governments regulate it?
So far, the United States is a mixed bag. While some legislators — like Senator Cynthia Lummis — are pushing for bitcoin-friendly regulation, others like Senator Elizabeth Warren are pushing for far more critical legislation.
While the perspective of the American federal government on bitcoin is currently being debated, right now many states already have anti-bitcoin laws in place. For example, the financial capital of the United States, New York, has the most stringent rules against cryptocurrency due to its BitLicense. The existence of the BitLicense means that bitcoin enthusiasts are prevented from taking part in many innovations. Even mayor-elect Eric Adams had to resort to alternative, costlier means to get his first three months salary paid in bitcoin.
Many investors, like Shark Tanks’ Kevin O’Leary, argue that this uncertainty of regulation is causing many to avoid the space. This is where Sunak could be a game changer.
The United Kingdom’s new prime minister Rishi Sunak can be seen as an ally for bitcoin. Sunak’s youth and Stanford pedigree make many feel as though he is open to new technologies — especially one as lucrative as bitcoin. As Finance Minister, Sunak pushed for tangible pro-cryptocurrency legislation. He supported the “Financial Services And Markets Bill,” which, according to Coindesk, is widely seen as cryptocurrency-friendly, as it pushed for increased acceptance of stablecoins.
Moreover, there are competitive advantages for Sunak embracing cryptocurrency. The established laws in America in tandem with the uncertainty towards future laws, means many in the world’s largest English speaking country are looking for alternatives. This is where England could capitalize.
The bitcoin community is digitally nomadic in nature — as seen by the migration of enthusiasts to locations like Malta and Portugal. If Sunak were to create incentives for bitcoin companies to move to places like London it could siphon capital and talent away from America.
Finally, with the United Kingdom’s growing deficit problem, the nation desperately needs outside-the-box type solutions. Nothing would be more outside of the box than for Sunak to make London the bitcoin capital of the world.
While many Bitcoin fans are excited for Sunak’s leadership, some express concern about the authenticity of his support for cryptocurrency.
Many point out that Sunak’s wealth and pedigreed education makes him part of the “establishment,” and innately against the rebellious and alternative nature of bitcoin. A prominent YouTuber, Wendy O, compared him to SEC Chair Gary Gensler. Gensler, who taught courses on digital currencies at MIT, was originally seen as pro-cryptocurrency. However, since his appointment, Gensler has frequently criticized the space and urged for increased investor protections.
Sunak’s support of central bank digital currencies (CBDC) also troubles Bitcoiners. People like Matthew Kratter, of the popular show Trader University, argue that CBDCs symbolize everything that is wrong with government money. For Kratter, the CBDC’s are inherently centralized and encourage state surveillance of individuals' finances — something many Bitcoiners see as going directly against the ideals of bitcoin. Kratter went so far as to call Sunak’s vision for a U.K. CBDC a “spycoin.”
Sunak entered office at a time of unprecedented financial hardship in the United Kingdom. With an ever increasing deficit, the weakening of the pound, a cost of living crisis and widening wealth gap, it might be safe to assume that bitcoin and cryptocurrency aren’t at the top of his agenda.
While we cannot predict his relationship with bitcoin, it should be noted that just the idea of a pro-bitcoin prime minister could be enough to spike the asset’s price.
At this early stage, it is impossible to predict how Sunak will directly impact the price of bitcoin, but as of now his background shows him to be an ally to the oft-maligned industry.
This is a guest post by Jacob Kozhipatt. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.
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