Coincidentally a week after my prediction that governments would use the bursting of the crypto bubble as a scapegoat for continued bad economic policy and the unraveling of all other debt-fueled bubbles, RT releases a report on Saxo bank’s prediction that Russia and China are on board with that plan.
“The rise of bitcoin and other cryptocurrencies has been one of the most spectacular phenomena of financial markets in recent years. Bitcoin will continue to rise – and rise high – during most of 2018, but Russia and China will together engineer a crash,” the Danish bank predicts.
Amusingly enough, I linked to this other article in my prediction post that says that Russia and China are building up the bubble as much as they are willing to pop it when they are ready to do so.
Those two articles describe the manipulation I was expecting, and perhaps we’ve just undergone the phase that ropes in the maximum amount of retail investors (a.k.a. suckers) into this pyramid scheme.
Now, according to this latest Bloomberg article, the U.S. government is joining in too to pile on the negative publicity bandwagon. Perhaps the manufactured psychological shift is on its way.
Investors in bitcoin and other virtual currencies would lose a lucrative tax break under the Republican tax bill that’s on its way to President Donald Trump’s desk.
New limits in the bill would bar cryptocurrency owners from deferring capital gains taxes when trading one type of virtual currency for another — effectively closing a gray area in the tax code, experts say.
While it may not seem serious on the surface, it is merely the tip of the iceberg in terms of intervention that has been going on, and will go on with more intensity.
If my prediction rings true, expect all these leverage-fueled bubbles to unravel soon, and expect a lot of the blame put on cryptocurrencies. Cryptocurrencies, under the perception that they did not involve central banks or government in their boom and bust, become the perfect excuse to blame the collapse of other debt-fueled markets, thus justifying more centralization and intervention to avoid another such catastrophe.
* * *
If you liked this article, be sure to leave a comment, share, and subscribe to the RSS feed for more commentary on cryptocurrency and other technological trends.