Trudeau Just Closed The Bitcoin Argument – Seeking Alpha

Trudeau Just Closed The Bitcoin Argument – Seeking Alpha

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In an article back in October, I warned that Bitcoin (BTC-USD) may have topped. The price proceeded to fall 50% and has struggled to regain its previous bull market. Last week we have seen actions by the Canadian government to block Bitcoin payments to the Freedom Convoy. I will describe why Trudeau has just shut down the argument for Bitcoin.

Court order moves to freeze crypto assets

The Canadian truckers’ Freedom Convoy, which has been protesting COVID mandates over the last few weeks, has entered new territory. The country’s lawmakers are taking federal action to shut down funding and unleash a tougher police response.

Last week saw funds in over 120 crypto addresses ordered to be frozen in a special injunction by an Ontario court. A Mareva injunction was signed on Thursday by Ontario Superior Court of Justice Judge Calum MacLeod. The injunction will freeze blockchain addresses in multiple cryptocurrencies. This type of injunction is used in the UK and Canada to freeze a defendant’s assets in order to prevent them from being spent, hidden, or moved ahead of a judgment.

The private suit also instructs several financial institutions, platforms and digital exchanges to freeze any transactions related to wallets of the digital addresses. The financial institutions include TD Canada Trust and ATB Financial, and fundraising platforms. Digital assets platforms and exchanges were also listed, including Binance Smartchain, and PancakeSwap.

The news came a day after the Canadian government froze 34 crypto addresses in connection with the ongoing trucker protests, which have blocked bridges and border crossings into the US.

What does this mean for Bitcoin?

Bitcoin holders should take note of this week’s developments because the same thing will happen to the coin in the future. The governments of the largest world economies are letting you have a peaceful protest with your decentralized, digital money but, when the time is right, they will come down hard and insert their own Central Bank Digital Currencies.

The path ahead has already been shown by China which crushed its mining industry and exchanges as they get closer to a digital Yuan through pilot programs. I have warned about this in my previous articles and any doubters should read up on their monetary history.

Governments have never stepped aside to let an upstart or decentralized, monetary system take hold. Investors have already seen the great lengths to which the Western nations have gone to protect their hegemony of the world’s financial system with global conflicts and massive bailouts and quantitative easing programs.

The US is getting closer to the regulation of the cryptocurrency industry with the Biden administration’s move to an Executive Order this week. Bitcoin enthusiasts think that this will bring acceptance of the coin’s future destiny as the lynchpin of a new digital financial world. It is more likely to signal the end for Bitcoin as a serious threat.

According to early reports, “The study will also include financial stability issues in the use of cryptocurrencies and digital assets.”

Measures to protect the market will also be suggested by the Office of the Controller of the Currency, Federal Deposit Insurance Corporation, the Commodity Futures Trading Commission, Federal Reserve, and the Securities and Exchange Commission.

Federal Reserve officials have previously labeled Tether as a “threat to financial stability”. This was followed by a UK policymaker at the Bank of England, who said that BTC could trigger a financial meltdown and tough regulation was needed. That was before the BoE said earlier this year that the coin could become “worthless”.

China has warned you of what the governments will do to protect their control of the financial system. The central banks are warning you to get out.

Bitcoin cannot be shut down, but the governments control the fiat money off-ramps and can render digital wallets useless.

But, what about Ukraine?

This week gave Bitcoin enthusiasts another headline to cling to with the news that Ukraine had legalized Bitcoin.

The country’s parliament approved the final reading of a bill to ‘legalize’ bitcoin and cryptocurrencies. However, the country has not made bitcoin legal tender. At present we have only seen the tiny country of El Salvador make that move and they have little to lose from trying something out of the box.

The timing of the Ukraine move means little for Bitcoin when control of the country is on the brink of being contested by Western Allied forces and Russia. If Ukraine remains free, it will likely pivot further towards the Western financial system. If it does not remain free, it will fall into the hands of a country that has also been floating an outright cryptocurrency ban.

Monthly chart highlights weakness

Bitcoin has slumped from around $44k to $40k last week and was struggling to hold that level heading into the weekend.

If BTC sees another week of bearish price action there is a risk of further losses with key support at the $30k and $20k levels.

Bitcoin

BTCUSD – M (Trading View)

Conclusion

Bitcoin has replaced gold as the go-to asset for some analysts seeking an end to the current financial system. While both would have their benefits, the governments are not ready to step aside and let a decentralized system emerge. BTC enthusiasts have been losing the fight over the last year as the coin has lost big ground from the $64k highs and is at risk of further losses after the positive catalysts dried up.

Just in time for further weakness is a US government and a global central bank clique that is ready to clamp down on the sector. Countries such as China and Russia have been more aggressive, but when the time is right, the West will follow. The final argument for Bitcoin is that it cannot be shut down. The Canadian government just destroyed that thesis in the last week. Bitcoin cannot be stopped, but governments can shut down their fiat off-ramps and make mainstream adoption a pipedream.

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