Recently there has been a number of global regulatory actions towards Bitcoin, governments have issued warnings, policies and legislation that could be seen as efforts to slow down Bitcoin.
Ironically, developments have seen the cryptocurrency increase in market price and trade volumes, as Bitcoin price climbed above gold on March 2.
Two-way effects of government intervention
Some see the interventions as deliberate efforts to hinder the development of Bitcoin but others appreciate the same events as necessary towards the proper mainstream adoption of the cryptocurrency.
Jason Cassidy, President at Crypto Consultant, says:
“While several regulatory developments are being deemed as a negative towards Bitcoin, there have been just as many positive developments in the space. Recently, the Philippines moved to officially recognize Bitcoin as a payment method, looking to bring in regulation and create a legal framework for end users to safely operate within. Similar types of overt recognition of Bitcoin have recently begun taking place in Japan and the UAE as well.”
The fear of the unknown
President of Bitwage, Jonathan Chester tells Cointelegraph that people are afraid that those government warnings will end up in an all-out ban the technology, noting Russia and China as typical examples.
Chester explains that while an obvious result is that media will focus on the government action instead of the Bitcoin price during this time period, acting as a deterrent to new users, there is another effect. He describes this effect as the uncertainty for businesses.
“I personally know of a Russian company that shut down its doors due to the government uncertainty.”
He notes that uncertainty does not only hold back adoption, it also stifles innovation, explaining that Bitcoin is a global technology that is resistant to geopolitical manipulation, as we have seen by the reduced effects the PBOC announcements have had on the price. This means that while innovation is stifled in one part of the planet, it flourishes elsewhere, such as in the United States or Japan. In places like Latin America and Africa, where there is a strong need for a store of value that is not easily manipulated by government, an outright ban of the technology will just force the currency into black markets. Many countries in such places already have black markets for the US dollar, so this would not be a new concept in these parts of the world.
These warnings and government actions according to Chester do not change the ultimate value proposition of Bitcoin as an incredibly versatile store of value that is incredibly fast, cheap and easy to transact with, assuming you send the correct transaction fee while remaining censorship resistant. So as more people learn about these value propositions, people will find ways to leverage these value propositions in a way that matches their needs.
“If governments ban the technology, it moves underground for use in black markets. However, if the government chooses to work with the technologies and the pioneers building on top of the technology, they will likely reap the benefits of a stronger economic system. This is because people will have more money to spend, instead of worrying about how to send, receive or even store their money. Thus, more commerce and more taxes.”
One phenomenon that has been significant even while the assumed resistance from government and regulatory bodies have persisted is the ironic increase in value and popularity of the cryptocurrency.
The cat is out of the bag
Jeremy Epstein, CEO at Never Stop Marketing holds the opinion that whatever may have happened, Bitcoin was already on its way to improved development.
“Bitcoin would have grown anyway with or without the interventions because there is a growing awareness of its inherent value and safety as a ‘store of value.’ Ironically, the government actions are increasing awareness of Bitcoin and leading people to wonder why the government feels so threatened by it.”
This according to Epstein leads to a natural inquiry into currencies, money and etc. which invariably allows people to realize that Bitcoin could be a better asset. He also notes that resilience in the face of persecution delivers a positive outcome because this is an idea whose time has come.
As Schopenhauer, the German philosopher points out, eventually, the breakthrough is viewed as self-evident.
The whole scenario is summarized by Cassidy as, the good simply outweighing the bad. Metaphorically, Cassidy says that cat is now officially out of the bag and Bitcoin is fast becoming a household term. As more countries experience systemic issues with their national currency, Bitcoin will continue to act as an attractive alternative.