Max Keiser – you can’t stop adoption, growth or acceptance of Bitcoin

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Some argue that the recent price swings in the value of Bitcoin have intensified the debate about cryptocurrencies and further divided skeptics and enthusiasts. After reaching just over $20,000 recently, Bitcoin plummeted on Friday to well below $12,000, equivalent to about 42% of its value according to Coinmarketcap.

Whilst skeptics are playing the old “I told you so” tape, the enthusiasts claim that this is just a healthy correction and that Bitcoin will jump even higher once it gets past it, so now would be the best time to buy in.

RT conducted an interview with Max Keiser, host of RT’s Keiser Report and Dr Jack Rasmus, professor of Political Economy at St. Mary’s College in California.

Dr Rasmus emphasized that we’re going through at the moment is pretty much a speculative bubble:

“It’s not going to be the currency of the future because the central banks will start issuing their own digital currencies before it threatens the money supply. But it is definitely a speculative commodity bubble. Bitcoins and other cryptos are a commodity play, much like gold, in fact, they’re sucking a lot of money, capital investment out of the gold market, and it’s a speculative play, and I think it’s going to go higher. But it is a speculative bubble, and the key question is will it pose some sort of danger to the financial asset markets in general,”

On the other hand, Max Keiser explains that people are trying to move away from government-controlled currency and this is what’s driving the bubble:

“What’s driving the action at bitcoin is people who are looking to store value and escape the US dollar, which is a tulip bulb of our era. The stock market and bond market are the tulip bulbs of our era. The tulip bulb of 1630 was driven by highly leverage transactions, that’s what gave us tulip bulb mania of 1630. Bitcoin is the opposite of that.”

Another important factor contributing to this bubble is the high levels of financial speculation taking place in Asia, where extreme margin buying is taking place according to Dr Rasmus:

“Margin and retail buyers in Japan are driving this market. It is not the tech nerds in the US. And whenever you get extreme margin buying, you are going to get a lot of volatility. And it is going to collapse. Most of this trade is located in Japan, and the Japanese financial authority has legitimized this. Cboe and CME are legitimizing this, and the hedge funds are jumping into this. You are going to get ETFs (Exchange-Traded Funds) as one of the things driving the stock market right now, and passive index investing when you get the ETFs in bitcoins with volatility you are going to get a psychological effect of ETFs collapsing in bitcoin, and it could spill over to the stock market and bond market ETFs. That’s a cotangent channel, and that’s a big risk,”

After both the French and German finance ministers are keen to discuss Bitcoin and cryptocurrencies at the G20 summit, Max believes that it would be very difficult for governments to actually regulate the crypto market:

“There’s no way to stop bitcoin. It’s unstoppable. There’s nothing they can do to stop the adoption, growth, acceptance of bitcoin as a store of value, as a currency and as a unit of account. That’s the history,”

Throw Coins!

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