Will Zuckerberg destroy Bitcoin?

See the latest Australian dollar analysis here:

Australian dollar bid as virus fixed!

And herein lies the problem for all crypto, via the FT:

Facebook’s hopes of launching a new virtual currency have suffered another blow, as two more financial regulators said on Tuesday they are paying close attention to the social media company’s plans.

Both the international Financial Stability Board and the UK’s Financial Conduct Authority have said they will not allow the world’s largest social network to launch its planned digital currency without close scrutiny.

…In a letter to G20 leaders ahead of their summit in Osaka, Japan this weekend, Randal Quarles, the head of the FSB and vice-chairman of the Federal Reserve in charge of banking oversight, warned of the potential risks posed by digital currencies that become widely used.

“Though cryptoassets do not currently pose a risk to global financial stability, gaps may occur where cryptoassets fall outside the scope of regulators’ authority or from the absence of international standards,” Mr Quarles said in the letter on Tuesday.

Seriously, the arrogance of Mark Zuckerberg is something else. He seems to think he can personally be bank, central bank and global payments system. What next, a Facebook aircraft carrier? Park it off  San Francisco and politely ask all of Silicon Valley to adopt Libra?

To repeat, the moment cryptocurrencies are successful they are also an imminent risk to standing monetary regimes. It’s an absurd paradox at the heart of the entire crypto sector. They can only succeed if they fail and they can only fail if they succeed. Describing this as a safe haven asset is one seriously flawed sales pitch.

Not that anyone cares today ’cause it’s goin’ up!

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  1. Your last sentence is the most prescient

    Not that anyone cares today ’cause it’s goin’ up!

    Ignoring silly academic/economic paradoxes and issues is how big profits are made.

    Sydney housing was a shtihouse investment proposition in 2007. Even worse in 2009. Garbage in 2011. Everyone who got in is sitting on megabuxxx and attending parties, though.

    People who were too concerned by the “issues” and “risks” in that asset at those times are now referred to as loosers.

    • You really need to get over the house price scenarios of 12 years ago, move on please, you will feel better.
      As I recall Bitcoin hit $20k AUD? how much did it fall?

      • Mark. You’re missing my point – I’m not bemoaning housing, I’m rubbing it in for the loosers.

        And pointing out another opportunity for mega-profits (improbable as they may seem)

  2. DominicMEMBER

    The IMF is a BIG supporter of the concept of negative rates. However, in order for such a regime to be effective, ‘money’ needs to be fully captive in the banking system, otherwise money will escape elsewhere (crypto, cash, precious metals etc). Therefore, expect the authorities to move toward a total cash ban, (attempted) destruction/control of cryptos and, presumably, private ownership of precious metals would be banned too.

    As HnH says, cryptos represents a serious threat to the existing monetary regime (a State monopoly). The authorities are after every increasing control – not decreasing. Just imagine, your dollars in the bank will one day be subject to a 5% or more haircut annually, so, you will either be invested in stocks or funding the Gubbermint’s burgeoning deficit.

    On the bright side, at least we live in a free society. Oh wait …

  3. I’m not a fan of how all “crypto” is being bundled up as one thing, it’s a bit ignorant. They are discrete projects, some actually being used in the banking system already. It’s got me beat why BTC hasn’t gone away yet.

    • C.M.BurnsMEMBER

      brand recognition. and it has the most vested interests constantly spruiking it on every social media platform you can name and some you haven’t even heard of

    • If your talking about XRP. I think the problem with that coin (lol) is that the company pumps in approx 1 billion XRP back into the system to raise funds fir its other work, I don’t actually think that XRP and the banks themselves are connected, the banks are just using a platform.

  4. As much as I agree with much of this site, and even agree with the scam that is cryptocurrencies, every time you guys post a negative articly on crpto, btc goes up. And up.

    HnH is the Pascoe of btc? 😀

  5. mikef179MEMBER

    Bigger nations like US and Aus that have big banks will indeed try and trip crypto up all the way. It doesn’t matter. More and more people are getting into it. And there will be smaller nations who will see it as the massive opportunity that it is to reduce costs and get a leg up in the world economy.

    After all, at the end of the day, why do you need a centralized ledger and all the infrastructure that comes along with it, not to mention the fat cats feeding off of it (how much money does banking cost the modern economy?) when you have a decentralized ledger?

    • What you’re saying, without saying it directly, is that “money” is jsut an accounting system. And crypto may as well be that accounting system.

      But typical “money” can be fiddled with… and the governments like that. crypto can’t be fiddled with, so the governments shouldn’t like it.

      • mikef179MEMBER

        Yep, that’s pretty much exactly what I’m saying.

        But not all governments are created equal. And those that aren’t part of, and or benefit from the USD supremacy, might as well go with something that takes them out of that system. Let’s face it, the US is not benevolent when it comes to money.

      • “crypto can’t be fiddled with”

        I agree with everything you have said in this thread except for this statement. Two major crypto owners can very easily sell each other crypto to drive up the price. There is no repercussion in doing so due to being largely unregulated and untraceable. It is actually what many commentators suspect has been happening with Bitcoin’s rise to 20k, and the fall back down to $3.5k, and the rise again.

      • That’s true enough Freddy. What I mean is not that it CANT be fiddled with, more that it can’t be fiddled with BY GOVERNMENTS (as easily with their own issued fiat).

      • The government fiddling may eventually happen. Many years ago when US Govt realised Online Poker was getting too big and depriving them of tax revenue they shut it down overnight by banning all payments into and out of Poker sites. The threat of BTC owners losing access to their money will be enough to drive it underground. I presume the only reason it hasn’t happened yet is BTC only a minor annoyance at this point in time.

  6. The US govt has overthrown entire countries that have threatened its economic stability. Imagine what the US govt it would do to a US company that threatened the stability of the USD. FB shareholders should tell Zuckerburg to go away and commit financial suicide with his own money.

  7. mikef179MEMBER

    Now that we have crypto, banking can be entirely automated. It’s one of the most basic, simple, repetitive fields in the economy. Full of useless rentiers. If I was a big fat banker, I’d be worried too. No wonder many of them are running to their political mates.

  8. If you think its competing with BTC you’re missing the point. It’ll be backed by USD.

  9. Glad I bought and ignored all the doom and gloom back in 2018. I was convinced after reading the Bitcoin Standard. Excellent read. If bitcoin was to be hacked or destroyed like the tulip bubble – it would have taken place now. My returns are much, better than any crappy housing investment. I was looking at an investment apartment in Melbourne or Sydney out of interest to see if I could put in a low ball offer. Thanks goodness I did not… I would be down over 50K or more I forecast. My bitcoin investment has blown away any other asset I have invested in this year. I believe in the technology – and I have an IT background. This technology is brilliant but also challenging going forward. If we are all to bank on the blockchain, we will ultimately be monitored 24/7. However, I want to see all politicians on the blockchain – every penny they spend, I want to see where it is going. How much lunch cost, what they paid for phone, internet, taxis and the likes. After all, it is my tax money and I want full accountability. For sensitive transactions, keep them off the block chain. Have you noticed that those who have the most to hide despise the blockchain technology the most. I would too – as it is going to catch you out. It is the big brother of money and wealth storage and the big end of town is piling in… that is not retail investors as you saw in 2017… you can confirm that based on the very low search rates on Google for Bitcoin and how to buy. Bitcoin is becoming mainstream whether we like it or not.

      • The Traveling Wilbur

        Just when you thought you’d been able to distil and impart one droplet of enlightenment, it dribbles down the plughole of life eh Peachy?

        Ah well, keep trying. There’s always someone else out there who needs edumacating. Love your work (which I should say more often, if it wouldn’t be likely to get me banned).

      • TTW, it took me a long time to work out what you’re saying…. I think it is praise. Funny praise.

        (Remember English is not my first language. I have to pass all the posts on here through a English>>Mandarin translator program, then all my own posts in the other direction (ie mandarin>>English). When you write cryptically, as you do, it makes it all the more challenging for me and my office to decipher)

    • Oh dear, you don’t know how the banking system works…. All tax is fully expunged as soon as it’s paid, it’s not your “tax money” time for some reading and less listening to the politicians and government.

  10. Lol to people thinking crypto will ever compete with fiat. People are way too addicted to debt, mortgages, student loans, car loans, credit … people will never stop preferring the easy money.

    Bitcoin was and always will be valuable because it is a collector’s item. It’s scarce, deflationary and the first ever decentralized public blockchain. The creation of it is anonymous, legendary. No one really cares to buy a coffee with it, they want to trade it or hoarde it.

    In many ways it’s better than most collectibles. There’s little to no barrier of entry to own it, they’re much easier to store and maintain than fine art or collectible cars. Its reach is global and cross-cultural and it’s easy to liquidate.

    Forget use cases, forget alt coins, they’re missing the point.

    Governments will relax around BTC once they realise it’s just a tradable assest that can be regulated like all the others. Which government wouldn’t want those capital gains tax? Watch what Russia will do soon around crypto. Even police love it when criminals use BTC because it’s way more traceable then cash.

    Just don’t FOMO in when BTC goes parabolic and it has been a pretty good store of value.

    Libra is a centralized stable coin, backed by currency. It’s not anything special. It will help the numbers of unbanked people in the world, make sending money overseas easier, and offer an on-ramp to other cryptos. It will be good to have a highly reputable stablecoin to park money in when you want to divest your BTC. I look forward to it.

    • A collectors item until a severe electrical storm from the sun wipes out the world’s power grids. By the way I bought $21,000 worth when it was selling for around $5500 a BTC way back in March.