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> We have plenty of historical and current examples of governments imposing capital controls to restrict access to foreign currency. Very rarely does it result

> We have plenty of historical and current examples of governments imposing capital controls to restrict access to foreign currency. Very rarely does it result in the market price of the foreign currency going down. Usually quite the opposite. That's a nonsense comparison. When governments impose capital controls it means their currency is already sinking and it's a last ditch attempt to prevent this inevitable scenario. BTC valuation is entirely based on narratives about how it's going to replace standard currency in whatever story is popular, and from what I can see right now it's being pumped up by funds who can't find other good investments in this markets and are willing to play with crypto. If it's illegal for US funds/citizens to hold it/be involved with it - the selloff alone would kill the market instantaneously.

dcolkitt 5y ago
The US only constitutes 15% of global GDP. There's no reason to think that US investors represent an outsized position in crypto holdings. American funds may have large positions, but that's largely because the American asset managers tend to attract substantial overseas positions. There's no reason to think that, say a Japanese pension fund, that's invested in Grayscale is going to say, "oh shoot, guess there's no possible way to allocate to this asset class now". They'll just reinvest that same allocation in a UK or Caymans domiciled fund. If anything the 85% of crypto investors who aren't invested, will most likely hoard in anticipation of the policy being reversed. For better or worse the US government has extremely low credibility when it comes to long-term policy consistency. Almost any US policy can simply be waited out until Congress/White House flips parties.
- dragonwriter 5y ago
  > The US only constitutes 15% of global GDP. There's no reason to think that US investors represent an outsized position in crypto holdings. Holdings would seem to be more reasonably assumed to be proportional to wealth [0], not GDP. The US has a significantly larger share of global wealth than it does of GDP. [0] or maybe more-than-linearly related, since less-wealthy people will have more of their wealth in directly-used assets like tools, vehicles, and homes.
- reader_mode 5y ago
  You bitcoin guys are hilarious with your narratives. "If it crashes it's just going to be an opportunity for the rest to get in"... Bitcoin market swings on Elon Musks tweets, a full scale ban in the US would obliterate it.

dcolkitt 5y ago

The US only constitutes 15% of global GDP. There's no reason to think that US investors represent an outsized position in crypto holdings. American funds may have large positions, but that's largely because the American asset managers tend to attract substantial overseas positions. There's no reason to think that, say a Japanese pension fund, that's invested in Grayscale is going to say, "oh shoot, guess there's no possible way to allocate to this asset class now". They'll just reinvest that same allocation in a UK or Caymans domiciled fund. If anything the 85% of crypto investors who aren't invested, will most likely hoard in anticipation of the policy being reversed. For better or worse the US government has extremely low credibility when it comes to long-term policy consistency. Almost any US policy can simply be waited out until Congress/White House flips parties.

dragonwriter 5y ago
> The US only constitutes 15% of global GDP. There's no reason to think that US investors represent an outsized position in crypto holdings. Holdings would seem to be more reasonably assumed to be proportional to wealth [0], not GDP. The US has a significantly larger share of global wealth than it does of GDP. [0] or maybe more-than-linearly related, since less-wealthy people will have more of their wealth in directly-used assets like tools, vehicles, and homes.
reader_mode 5y ago
You bitcoin guys are hilarious with your narratives. "If it crashes it's just going to be an opportunity for the rest to get in"... Bitcoin market swings on Elon Musks tweets, a full scale ban in the US would obliterate it.