When your news is entertainment, managed chaos prevails and through managed chaos democracy falls to dictatorship – Aristotle
Tucker Carlson, the host of one of the most watched TV show on Fox News, has suggested that bitcoin is up because the government is buying it to pay off ransomware.
Speculating on why flights were grounded last week across USA, he suggested this is usually due to ransomware.
“Almost all ransoms like this are paid in bitcoin,” Carlson said. “So if the US government was buying huge amounts of bitcoin in order to pay a ransom, bitcoin prices would surge of course. So the question is has that happened? Oh yes, it has happened.”
He then goes on to talk about the bitcoin price which he says has shot up since the nationwide ground stop last Thursday.
Presumably therefore by “oh yes,” he means that bitcoin’s price has surged, rather than giving an affirmative to the suggestion gov is buying bitcoin. Instead he asked is it a coincidence the price surged since the planes were grounded.
Probably, but on the wider topic of gov and bitcoin, we know the US government uses bitcoin to pay for information.
In 2017 when ransomware first came to the scene, including briefly bringing down the NHS, there was speculation governments would have to buy bitcoin in anticipation of such attacks.
There were even reports on how much was paid, but the sums aren’t huge because these ransoms are not targeted, so they have to ask what they think an ordinary person would be willing to pay for their data, which is about $100 or $200.
We’d estimate in total it is probably no more than $100 million paid in ransom since 2017 and globally. That’s a big amount in other contexts, but where bitcoin’s market cap is concerned, and thus its price, it is a fairly small amount that probably wouldn’t even be noticed on the price tickers.
Far more interesting than the gov, however, is the central banks. Have they bought bitcoin?
Both China and Russia are piling up on gold, maybe as an anti-sanctions measure, but you can’t easily pay with gold and gold is very hard to transport.
At some point they will have to diversify to bitcoin, including for forex market actions because bitcoin is sort of a hedge and can often be inversely correlated with fiat, that being the big ones like the dollar or the euro.
It may still be too soon for this, but sophistication is increasing in US specifically and the Federal Reserve Banks have shown sufficient diversity to include within their wider civil service ranks what might appear like bitcoiners or bitcoin neutral personnel.
Still we’d expect a more forward looking central bank to do it first, perhaps a small-ish European country, but this is something that they probably wouldn’t reveal, and so we won’t know until it is obvious.
Where gov is concerned however we do know. They do buy bitcoin and even use it, and in the national security crowd, they’re fairly big bitcoin supporters.
But, where this plane grounding is concerned, that was some data corruption by some employee, so potential sabotage at worse rather than ransom.
A far bigger coincidence instead is that the dollar has been falling since October from 114 to 101 in its strength index, and that’s probably mainly because energy prices have been falling with energy commodities usually priced in USD, and therefore seemingly affecting the dollar.
In addition, bitcoin was sidewaying for six months at what might seem like low levels from the peak. So arguably there was no more room for down speculation, which left only the up speculation.
The main takeout from this segment however is not the theory, but that Carlson gave a shoutout to bitcoin, and in a way that he suggests will surge.
Unfortunately though most of his viewers are old, and although they’ve learned how to Facebook, they probably don’t know how to patcoin, but it’s a signal nonetheless that it is safe to talk about bitcoin again.