Is Rishi Sunak Bitcoin’s October Surprise – Bitcoin Magazine
This is an opinion piece by Jacob Kozhipatt, a YouTuber and writer.
The term “October Surprise” is used in politics to describe a last-minute paradigm-shifting event that occurs a month before a US election. For example, in 2016 the FBI reopened its investigation into Hillary Clinton’s private email server, an event that many claim led to her loss in the 2020 election. In 2020, then-President Donald Trump contracted COVID-19, just weeks before the November election.
Bitcoin markets need an upheaval. 2022 has been a tough year for the price of bitcoin. Right now, bitcoin is ~65% below its price just one year ago, far from the six-figure price prediction that models like stock-to-flow and long-term bulls like Tim Draper predicted.
Some are hoping that the appointment of England’s new cryptocurrency-friendly Prime Minister, Rishi Sunak, could be a big positive change. Sunak, considered by many to be an ally of innovation, declared a year ago that he wanted the UK to become a “global hub for crypto-asset technology.”
Could Rishi Sunak’s election be the necessary “October surprise” to push bitcoin forward?
Bitcoin Regulation in 2022
One of the most important questions going forward with bitcoin is: How should governments regulate it?
So far, the US is a mixed bag. While some lawmakers – like Sen. Cynthia Lummis – are pushing for bitcoin-friendly regulation, others like Sen. Elizabeth Warren are pushing for far more critical legislation.
While the US federal government’s perspective on bitcoin is currently being debated, many states already have anti-bitcoin laws in place. For example, the financial capital of the United States, New York, has the strictest rules against cryptocurrency due to the BitLicense. The existence of the BitLicense means that bitcoin enthusiasts are prevented from taking part in many innovations. Even incoming mayor Eric Adams had to resort to alternative, more expensive means to get paid his first three months’ salary in bitcoin.
Many investors, such as Shark Tank’s Kevin O’Leary, argue that this regulatory uncertainty is causing many to avoid the space. This is where Sunak can be a game changer.
Why Rishi Sunak is good for Bitcoin
Britain’s new Prime Minister Rishi Sunak can be seen as an ally for bitcoin. Sunak’s youth and Stanford pedigree lead many to feel that he is open to new technologies — especially one as lucrative as bitcoin. As finance minister, Sunak pushed for tangible cryptocurrency legislation. He supported the “Financial Services And Markets Bill,” which according to Coindesk is widely seen as cryptocurrency-friendly, as it pushed for increased acceptance of stablecoins.
Moreover, embracing cryptocurrency is a competitive advantage for Sunak. The established laws in America in tandem with the uncertainty of future laws mean that many in the world’s largest English-speaking country are looking for alternatives. This is where England can capitalize.
The Bitcoin community is digitally nomadic – seen by the migration of enthusiasts to places like Malta and Portugal. If Sunak were to create incentives for bitcoin companies to move to places like London, it could draw capital and talent away from America.
Finally, with Britain’s growing deficit problem, the nation desperately needs out-of-the-box solutions. Nothing would be more out of the box than for Sunak to make London the bitcoin capital of the world.
Why Rishi Sunak Could Be Bad For Bitcoin
While many Bitcoin fans are excited about Sunak’s leadership, some express concern about the authenticity of his support for cryptocurrency.
Many point out that Sunak’s wealth and tribal education make him part of the “establishment”, and innately opposed to the rebellious and alternative nature of bitcoin. A prominent YouTuber, Wendy O, compared him to SEC Chairman Gary Gensler. Gensler, who taught courses on digital currencies at MIT, was initially seen as pro-cryptocurrency. However, since his appointment, Gensler has frequently criticized the space and called for increased investor protection.
Sunak’s support for central bank digital currencies (CBDCs) also troubles Bitcoiners. People like Matthew Kratter, from the popular show Trader University, argue that CBDCs symbolize everything that is wrong with government money. To Kratter, CBDCs are inherently centralized and encourage government surveillance of individuals’ finances — something many Bitcoiners see as going directly against the ideals of bitcoin. Kratter went so far as to call Sunak’s vision for a UK CBDC a “spycoin”.
Will Bitcoin’s price go up?
Sunak took office at a time of unprecedented economic difficulty in Britain. With an ever-increasing deficit, the weakening of the pound, a cost of living crisis and widening wealth gap, it’s safe to assume that bitcoin and cryptocurrency are not at the top of his agenda.
While we can’t predict his relationship with bitcoin, it should be noted that just the idea of a pro-bitcoin prime minister could be enough to boost the asset’s price.
At this early stage, it’s impossible to predict how Sunak will directly affect the price of bitcoin, but as of now, the background shows him to be an ally of the oft-maligned industry.
This is a guest post by Jacob Kozhipatt. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.
