Bitcoin price rose above $100,000 for a few hours on December 5 and peaked at $103,400. The financial press cannot resist constructing a shaky story about market forces. Therefore, Bitcoin’s rise above $100,000 is attributed to a market reaction as President-elect Donald Trump laid out a series of Cabinet, advisory and regulatory recommendations for cryptocurrencies after the crypto industry poured more money into funding Republicans in this last election cycle candidates than anyone had ever put into an election in history.

But crypto trading is thin and almost completely unregulated – perfect conditions for manipulating the commodities market. The public image of cryptocurrency is still shaped by Sam Bankman-Fried’s trial over failed crypto exchange FTX in 2023, which culminated in his conviction – not to mention the aftermath of the NFT fiasco. Crypto is considered the domain of cheap scammers. Normal people aren’t flocking to crypto.

Bitcoin price rose above $100,000 for a few hours on December 5 and peaked at $103,400. The financial press cannot resist constructing a shaky story about market forces. Therefore, Bitcoin’s rise above $100,000 is attributed to a market reaction as President-elect Donald Trump laid out a series of Cabinet, advisory and regulatory recommendations for cryptocurrencies after the crypto industry poured more money into funding Republicans in this last election cycle candidates than anyone had ever put into an election in history.

But crypto trading is thin and almost completely unregulated – perfect conditions for manipulating the commodities market. The public image of cryptocurrency is still shaped by Sam Bankman-Fried’s trial over failed crypto exchange FTX in 2023, which culminated in his conviction – not to mention the aftermath of the NFT fiasco. Crypto is considered the domain of cheap scammers. Normal people aren’t flocking to crypto.

Coinciding with the Bitcoin price news was the collapse of the crypto token Hawk Tuah. Haliey Welch, who told an oral sex joke that went viral on YouTube, parlayed her temporary fame into a career as an influencer and podcaster. This culminated in the meme coin cryptocurrency $HAWK, which was marketed solely for entertainment value, crashing upon launch, resembling a pump-and-dump – tokens were released to ordinary buyers shortly after launch, driving up the price drove.

Welch denied that insiders dumped her token and blamed it on automatic snipers who bought the token the moment it was released and then immediately dumped it. The Hawk Tuah token fiasco only reinforced crypto’s image as a place where fools lose their money for being stupid.

Bitcoin price has recovered since the peak of the last bubble in November 2021 – but retail trading volume in actual US dollars has not. Coinbase’s retail trading volume is $127 billion so far in 2024 – much higher than the $75 billion in 2023, but nothing compared to the bubble’s $545 billion in 2021.

Bitcoin remains a strangely useless asset that does nothing. You can only use it to buy, sell or hold. The only use for cryptocurrencies other than pure zero-sum speculation is Bitcoin’s original use case: circumventing regulations, usually for illegal purchases, money laundering or evading sanctions. In some cases it may be justified to circumvent some regulations – but most are there for good reason.

The largest crypto exchange with actual US dollars is Coinbase. However, price discovery takes place at the place with the largest trading volume: the offshore exchange Binance. This exchange admitted to a number of money laundering offenses in 2023, was fined over $4 billion, and was subject to strict compliance monitoring by the U.S. Department of Justice and FinCEN.

But the Binance trading venue itself remains an unregulated, free trade as long as US companies are not caught trading there. Every market manipulation that would be illegal in the United States is taking place at Binance and similar unregulated floating offshore crypto casinos – wash trading, flash crashes, delayed settlements, spoofing and exchange trading against their own customers.

Bitcoin trading volume is essentially in comparison to two dubious US dollar stablecoins: Tether and FDUSD. These are minted in billions at a time. It is frankly implausible that anyone with honest intentions would pour billions of dollars into Tethers or FDUSD to buy Bitcoins on an offshore exchange. They could have simply used the money to buy Bitcoins directly on a US dollar crypto exchange or, safest, buy Bitcoin ETF shares from any securities broker. The purpose of buying billions of Tethers is to manipulate the price of Bitcoin.

Each stablecoin is supposedly backed by a US dollar held in a bank account – except when this is not the case. Tether Inc. has long created tethers as loans out of thin air, with the collateral value listed being the loan itself. Banks do this too, but banks are regulated. Since Trump’s election on November 5th alone, 18 billion Tethers have been created, representing a total issuance of 135 billion. How far could you push the price of Bitcoin with 18 billion instant pseudodollars?

The other use case for Tethers is crime. Zeke Fauxs Number increases details Tethers’ value as a dollar replacement for those too crooked to get dollars – it is the currency of choice for “pig-slaughtering” love scams run by human traffickers. The UK’s National Crime Authority and the US Treasury Department recently cracked an international money laundering ring that used Tethers to service drug dealers, ransomware groups, Russian espionage operations and sanctioned companies; The NCA called Tether, not Bitcoin, the “cryptocurrency of the day.” News of the bust came out just before Bitcoin hit $100,000. Tether-powered Bitcoin pumps appear to coincide with bad news about Tether.

Tether Inc. is sensitive to the criminal use case of its coin and often freezes infected Tethers at the request of the Office of Foreign Assets Control and FinCEN – but only after the fact. This requires Tether Inc.’s operations to be much more organized than before – for example, in the years when reserves were tracked not in proper accounts but in a common spreadsheet that was often out of date. Despite its compliance efforts, Tether Inc. is the subject of an ongoing federal criminal investigation by the Manhattan office of the Southern District of New York over possible anti-money laundering and sanctions failures.

Tether Inc. has been working to improve its reputation in the centers of power. The Company does not operate in the United States, but holds a majority of the cash portion of its reserves in U.S. Treasury bills. These are managed by Cantor Fitzgerald, whose CEO Howard Lutnick wanted to become Trump’s new Treasury Secretary and is used for trading. Cantor Fitzgerald recently bought a share of Tether Inc.

After the crypto industry managed to provide unprecedented amounts of campaign funds to elect Trump, we should expect more such attempts to curry our favor. The Trump family’s own crypto project, World Liberty Financial, was set to fail until crypto entrepreneur Justin Sun, owner of the offshore crypto exchange HTX, stepped in and bought $30 million of his WLFI coin – thus becoming World Liberty crossed the threshold for Trump to get a $15 million payout from the project.

Flashy stunts like buying Maurizio Cattelan’s duct-taped banana artwork get a lot of sunshine comedian (with cryptocurrency) and then eat the banana on stage. These give the media something to talk about beyond Sun’s legal and regulatory issues, most recently the Securities and Exchange Commission’s ongoing lawsuit against Sun for securities violations. Sun looks forward to a “friendlier” US crypto market under the new administration with crypto advocate Paul Atkins as Trump’s planned SEC chairman.

One of the biggest channels of payback to his crypto allies could be Trump’s proposal at the 2024 Bitcoin Conference in June for a U.S. Strategic Bitcoin Reserve, apparently on the basis that the nation needs a supply of this speculative commodity, which is largely for crime is used. Trump originally suggested that the government keep bitcoins confiscated as proceeds of crime instead of selling them.

The current proposal to strengthen crypto is Senator Cynthia Lummis’ Bitcoin Act of 2024, in which the Treasury Department and Federal Reserve would purchase 200,000 Bitcoins every year for five years. The US government would become the Bitcoin holder of last resort, and the beneficiaries would be the crypto industry – not everyday Americans.

The new US government wants to ban “experts” from the bureaucracy. If the new executive wants cryptocurrencies to function freely, they will do their best to enforce cryptocurrencies and remove all possible obstacles. Cryptocurrencies’ ongoing problems with fraud and the impoverishment of retail investors, as well as regulators’ fears about the threat of cryptocurrencies’ contagion to the broader economy, are likely being kept quiet to ensure market opportunities for government insiders.

But in the end, gravity still works and a balloon can only be inflated so far. The Bitcoin bubble is an artifact of market manipulation and has no more economic substance than the Hawk Tuah coin. The U.S. government may be ready for looting, but other nations must take action to protect themselves from the effects of looting on a global scale.