No, Peter Thiel Didn’t Call Bitcoin a ‘Chinese Financial Weapon’
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No, Peter Thiel Didn’t Call Bitcoin a ‘Chinese Financial Weapon’

Sure, Thiel discussed a potential reality of Bitcoin. But let's put his comments into the proper context.
Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.

Recently, Peter Thiel discussed the potential reality of Bitcoin, which has largely been taken out of context. Once you place things into proper context, the fog of controversy clears up.

Becoming Digital Gold Has its Drawbacks

Most Bitcoin hodlers hold the same view as Elon Musk’s cryptic tweet about Dogecoin – inevitability.

After all, Bitcoin’s performance trajectory doesn’t leave much room for interpretation and doubt.

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The usual refrain regarding Bitcoin’s inevitability is that it cannot be actually banned unless the entire internet infrastructure is scrapped with it. Likewise, the 51% attack is a virtual impossibility because of its proof-of-work network spread across thousands of nodes, paid for through energy consumption. Although these points are important, they are overshadowed by potential institutional interference – demolishing bridges between fiat and Bitcoin.

Last month, Raymond Dalio, the billionaire founder of the world’s biggest hedge fund – Bridgewater Associates – made an interesting point that aged well in the light of recent news. In an interview with Yahoo Finance, Dalio made the now pervasive comparison between today’s America and the 1930s. While not referencing Weimar Germany specifically for its hyperinflation during the 1920s, he mentioned how the US federal authorities dealt with gold as a hedge against inflation:

″Back in the ’30s in the war years … because cash and bonds were such bad investments relative to other things, there was the movement to those other things, and then the government outlawed them,”

This is precisely the situation today, which is why Dalio followed the logical strand to its end.

“They outlawed gold.”…“That’s why also outlawing Bitcoin is a good probability,”

Indeed, in 1933, President Roosevelt banned the hoarding of gold coin, gold bullion, and gold certificates with Executive Order 6102. It took over 40 years, in December 1974 for President Ford to legalize private ownership of gold again. And, if you’re reading this article, you already know that Bitcoin transitioned from its original “Bitcoin: A Peer-to-Peer Electronic Cash System” vision to digital gold.

Bitcoin Squeezed Between Inflation, China and Geopolitics

Today, everyone views Bitcoin as digital gold, including current Federal Reserve Chairman Jerome Powell. While this property of Bitcoin is critical for becoming a target for potential institutional de-platforming, it acts in confluence with other important macroeconomic and geopolitical factors:

  • The waning power of America as the superpower on the world’s stage.
  • Crippled economy due to lockdowns that went from debt-based to hyper money printing.
  • China as the rising economic power that elevated 850 million people from poverty since the 1980s, according to the World Bank.

Lately, it is impossible to escape the notice that the entire media and security apparatus is becoming aggressively anti-Chinese in a bipartisan manner. This may seem contradictory given the fact that America expended great effort to boost China with massive trade deficits and off-sourcing of industries. Across the board, Made in USA has been replaced with Made in China.

Image credit: CNBC

While it is clear this imbalance benefited China and negatively affected America, this impression is inch-deep. Middle class America may have been gutted, but this is not the frame of thinking that occupies America’s managerial elites. Instead, the USD becoming the world’s global reserve currency is more important for total geopolitical dominance.

By tying China to US exports, no matter how negatively it affects US citizens, it serves as a powerful monetary control mechanism. It allows for the US to both political influence and threats while also receiving consistent cheap financing from the world’s creditors. In the wake the pandemic, China further gained ground while the US lags behind in both social stability and the GDP growth.

At the same time as China is trying to wrestle out of USD hegemony, it doesn’t seem to want to replace USD with its renminbi. The Chinese are known to take historic lessons to heart, and one of them is the economic phenomenon of Dutch disease – influx of money in one tending to cause decay in others. Instead, China may use indirect vectors of undermining USD hegemony – Bitcoin.

Peter Thiel Likens Bitcoin to Chinese Financial Weapon

Peter Thiel, billionaire, co-founder of many companies, including PayPal, and destroyer of Gawker, made the rounds this week by making a seemingly controversial statement. If you’ve read so far, you will immediately notice the lack of such controversy.

It’s not that he maligned Bitcoin by saying it is a “Chinese financial weapon”, as many have reported. Thiel simply observed that China is likely to use any tool in their toolset to undermine USD hegemony. This includes taking the long position on Bitcoin, alongside the Euro, as its meteoric rise on the world’s financial stage warrants.

Interestingly, at the end of that statement, Thiel describes digital Yuan as a “totalitarian measuring device” as if the entirety of the West has not embarked on implementing CBDCs. This may provide another pressure point to, directly or indirectly, de-platform cryptocurrencies.

First Signs of a Bitcoin De-Platforming Trend?

In turn, this plugs Bitcoin into an even more adversarial position against the American hegemony. In fact, we might have just witnessed an inkling in practice as the HSBC bank prevented their own clients from dealing with MicroStrategy.

The Tokenist had covered MicroStrategy and its CEO Michael Saylor on numerous occasions. After all, Saylor is not merely an institutional Bitcoin investor. He made Bitcoin the ultimate hedge against inflation and organized a conference titled “Bitcoin for Corporations” on February 3rd and 4th this year. It is safe to say that Bitcoin’s newly gained institutional legitimacy and prolonged bullrun is in large part owed to him.

On the other hand, HSBC, just like Deutsche Bank, is one of those global banks that are allowed to operate no matter the breadth and depth of their criminal mischief. In that light, it isn’t a long stretch to speculate that power centers are employing their leverage to influence the bank’s decision to start de-platforming Bitcoin in such an aggressive manner.

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Do you think Bitcoin’s de-platforming train has long departed the station, or are we just entering this phase once CBDCs are in effect? Let us know in the comments below.

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