On December 5, the American author and retired politician, Ron Paul, joined the Stephan Livera Podcast episode 234 and discussed cryptocurrencies and bitcoin at great length. During the interview, the prominent libertarian said when bitcoin came out he was still in congress and he thought the most important thing to do at the time was make it legal. Paul stressed that he advises cryptocurrency advocates to be vigilant toward the governments future intrusive financial meddling.

Ron Paul is one of the most beloved libertarians alive today and when he speaks a great number of people listen. Paul is an author of many books that encourage liberty and he also argues for the circumvention of unwarranted government entities like the Internal Revenue Service (IRS) and the Federal Reserve. The former congressman and presidential candidate has always been a staunch supporter of free markets, libertarianism, and a proponent of safe-haven assets like gold.

During the last few years, Paul has shared his thoughts about bitcoin and the crypto economy many times in the past. Moreover, even though hes not super well-versed in the technology, he likes cryptocurrencies for philosophic and legalistic reasons.

On December 5, 2020, Paul appeared on the recent Stephan Livera Podcast episode 234 and discussed bitcoin and free markets for over 30 minutes. As usual, Paul was a critic of the U.S. federal governments fiscal policies on the show, and he even questioned the existence of the American tax policy. As far as bitcoin and cryptocurrencies are concerned, Paul said: I think theres a lot of questions to be answered and I dont think the conclusion is there yet.

Ive been impressed with whats happened in the last few years because some people predicted [bitcoin] would be this popular, [and] other people were skeptical, Paul told Livera during the podcast. I think [skepticism] still exists, and my introduction to [bitcoin] has been mainly for philosophic and legalistic reasons, because I knew about this when it was becoming vogue when I was in congress. I thought the most important thing is to do is whatever we can to make [bitcoin] legal. This is why I [drafted] a bill that would legalize competing currencies because if its to be used as money, you are competing with the dollar and theres some people who dont like that.

The former politician further added:

There are tax collectors out there too that want to know exactly what people are doing with alternative currencies.

Paul said when he was a politician, he was mainly interested to make sure that it was legal.

I think it basically is and a lot of people trust it, a lot of people are buying and selling, but that doesnt totally reassure me because I have a skepticism toward the government all the time, Paul stressed. You see I dont even have total reassurance that the government wont come along and want to confiscate my gold. Governments are pretty ornery, ya know, the more successful crypto is going to be and bitcoin, I think the more you have to be aware of whats going on with the government becoming more aggressive.

Paul then compared crypto assets to those in the private sector offering better services in the world of education in comparison to the government school system. If you are doing private education outside the governments education [system], such as homeschooling or private schooling and if you are too successful, the government is going to want to close you down I think thats the way it is in finance too, Paul explained. During his conversation with Livera, Paul continued to criticize the IRS and the Feds massive 2020 money creation.

As of now it looks like a lot of people believe in the marketplace and believe it can work, Paul said about crypto advocates who support free markets. My advice is to be vigilant. Theres information collected, the [crypto] exchanges are not totally anonymous and I read the stories about the IRS checking up on things. For somebody like myself, I dont even believe in the IRS, let alone being flexible enough [to say] well as long as they are investigating me even if I follow the rules, well In 1932 in the depth of the depression, people were allowed to own gold, and we were on the gold standard, Paul declared.

The former congressman continued:

But immediately what did they do? They made it illegal to own gold all the way up until 1975.

During the podcast, Paul was very adamant about letting people make their own financial decisions. He highlighted that he likes the idea of how cryptocurrencies have made people think about that specifically. The self-professed gold bug and precious metals fan also added that he likes bitcoins supply limitation as well.

The other thing I like about it is so far, [is] theres a limitation of the creation of new currency. When I endorse cryptocurrency, I always admonish and say it will work if fraud is prohibited. Governments are used to doing fraud and thats why the systems always go badly, Paul added.

What do you think about Ron Pauls recent statements about the federal government and bitcoin? Let us know what you think about this subject in the comments section below.

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Ron Paul Advises Bitcoin Proponents to 'Be Vigilant' of Government 'There's Information Collected' - Bitcoin News

CNBC.com's MacKenzie Sigalos brings you the day's top business news headlines. On today's show, we break down a potential new law that could force major Chinese companies like Alibaba to delist from U.S. stock exchanges. Plus, CNBC's Sharon Epperson explains why anyone who tries to cash out on bitcoin's record run in 2020 needs to let the IRS know about it.

Here's what else is going on:

Employment growth slows sharply in November amid coronavirus surge

Nonfarm payrolls increased by just 245,000 in November, well below Wall Street estimates as rising coronavirus cases coincided with a considerable slowdown in hiring.

Economists surveyed by Dow Jones had been looking for 440,000 and the jobless rate to decrease to 6.7% from 6.9% in October.

The unemployment rate met expectations, though it fell along with a drop in the labor force participation rate to 61.5%. A more encompassing measure of joblessness edged lower to 12% while the number of Americans outside the labor force remains just above 100 million.

Tesla CEO Elon Musk has told friends and associates he plans to move to Texas

Tesla CEO Elon Musk put his California houses on the market this year while he was sparring with state lawmakers over Covid-19 restrictions. He's simultaneously been expanding operations in Texas and cozying up to Republican Gov. Greg Abbott.

Now, several of his close friends and associates say that Musk has told them he's planning to move to the Lone Star State. The people with knowledge of his plans asked not to be named because their conversations were private.

Musk, the world's second-wealthiest person behind Amazon's Jeff Bezos, is in Texas frequently already. He spends most of his time between Austin, where Tesla and his tunnel start-up Boring Company have operations, and a coastal village called Boca Chica, home to a SpaceX facility. SpaceX started operating in Texas in 2003.

Here's how worried you should be about your stake in Alibaba, now that the U.S. is going after Chinese stocks

President Donald Trump has a bill on his desk that could kick several Chinese companies off of U.S. stock exchanges and inflame an already strained relationship between Washington and Beijing.

The Holding Foreign Companies Accountable Act would force companies to give up their listings on Wall Street if they refuse to open their books to U.S. accounting regulators. It could also bar them from raising money from American investors.

While the law technically applies to companies from any country, it's mainly targeting Chinese corporations.

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Bitcoin surges higher, and the IRS wants to know who's cashing out: CNBC After Hours - CNBC

Those new to crypto, such as the institutional investors recently buying into bitcoins digital gold narrative, might now be looking around for the next big thing.

With the long-anticipated arrival of the Ethereum 2.0 upgrade on Dec. 1, that could be the networks native token, ether. But analysts say ether should be judged on its own merits and not as a bitcoin replacement.

Ive always thought this digital asset space is huge and its not just bitcoin because there are going to be different applications for different things, Raoul Pal, CEO and co-founder of financial media group Real Vision, said in Real Visions documentary Ethereum An Investigation, which was released on Nov. 30. I think of the two [bitcoin and ether] as having a very nice combined asset allocation.

For Pal, an early bitcoin investor, the rationale seems even more plausible these days: As bitcoins price hits a new all-time high, the number one cryptocurrency by market capitalization is now more expensive and thus potentially a riskier bet for new investors.

It can be expected investors are looking for a new opportunity in crypto at affordable prices. Given that ether is trading roughly 59% below its all-time high of $1,432.88, it is tempting to believe theres a bargain to be had. Whats more, the Ethereum 2.0 upgrade to increase the networks scalability, security and energy efficiency has generated a lot of hype.

However, at least for now, analysts and traders who spoke with CoinDesk dont think ether will replace the FOMO over bitcoin.

For institutional investors, they are buying BTC for the digital gold narrative, Ryan Watkins, senior research analyst at Messari told CoinDesk. ETH just isnt in that conversation yet.

Ether benefits from spillover and likely has more conversation around it from crypto-natives, Vishal Shah founder of derivatives exchange Alpha5 told CoinDesk. For the uninitiated, [it is] hard to see how bitcoin is not the sole on-ramp.

Weakening correlation between bitcoin and ether

Some analysts say that as more institutions pour money into bitcoin and push up its price, ether and other cryptocurrencies will gradually decouple from bitcoin.

Indeed, while bitcoin this week logged a record high price, ether isnt even close to its all-time high of $1,448.18. Data from CoinDesk shows the 90-day correlation coefficient between the prices of the top two cryptocurrencies, while still strong, has gradually weakened a bit since the summer from as high as 0.93 to nearly 0.7 at the beginning of December.

The thing about correlation is it can disappear at any time, Ashwath Balakrishnan, research analyst at digital asset research firm Delphi Digital, told CoinDesk. In that case, you want to understandthe core fundamentals of what you hold because if you hold ether as a proxy [to your] bitcoin exposure, and [when] prices decouple, you are now exposed to something very different.

Bitcoin has been used by many investors this year as a hedge against a drop in the purchasing power of U.S. dollars. Ether is considered the currency of the world computer, which aims to build an ecosystem of decentralized applications, according to Balakrishnan.

The close historical correlation between bitcoin and other cryptocurrencies may be due to how tiny the digital-asset ecosystem is relative to the global economy. The total market capitalization of crypto assets is estimated at $562 billion, a mere 1.7% of the S&P 500 stock indexs combined market cap of $32.2 trillion. With almost every crypto asset built on different fundamentals, non-bitcoin cryptocurrencies may be trending with bitcoin prices simply because the nascent market is still so small and insular.

Correlation data doesnt tell the whole story. Prices may move in tandem but the degree to which that happens is another matter. When the explosive decentralized finance (DeFi) boom hit the market during the summer, ethers price rallied to its highest in more than two years because most DeFi projects are built on the Ethereum blockchain. At the time, bitcoin was struggling to break a similar two-year record.

What Ethereum 2.0 could mean for investors

The market will have to wait and see what kind of real impact the ongoing Ethereum upgrade could have on its native currency because the final phase of the process is scheduled to be completed in 2023. But a major fundamental upgrade on the network underpinning ether could lead its price to move on its own fundamentals, instead of merely following bitcoins price.

The heart of ETH 2.0, which makes the entire system possible, is ether, according to a report by Messari. ETH will not only be Ethereums native store of value asset and fuel for transactions, but will also be Ethereums ultimate source of security from its role in the [proof-of-stake] system.

Thus, while bitcoin can be seen as somewhere between a store of value and a commodity on the asset superclass triangle, ether could ultimately become the first asset to be a combination of all three classes of assets: capital assets, commodities and stores of value.

When ethers price starts to be driven by its own catalysts, holding it as a proxy to having BTC exposure will not work as expected, Balakrishnan added.

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Why Ethereum and Bitcoin Are Very Different Investments - CoinDesk - CoinDesk

Bitcoin (BTC) finally managed to secure a new all-time high, but the digital asset rejected strongly near $20,000. On-chain analysts say a sell-off from whales and miners, combined with the $20,000 level acting as a resistance level caused a fierce drop.

For whales and high-net-worth investors, liquidity is the most important factor. Because they deal with large orders, they need to calculate the slippage their sell orders will cause.

Typically, the best period for whales to sell is when there is peak euphoria in the market met with large buyer demand. This allows whales to more efficiently sell their holdings without causing massive volatility.

When the price of Bitcoin officially surpassed its all-time high on Coinbase, it caused the market sentiment to become highly bullish. Shortly thereafter, whales started to sell, causing large liquidations across major exchanges.

CryptoQuant CEO Ki Young Ju explained that whale withdrawals were slowing down on Nov. 30. He said:

The confluence of whales keeping BTC on exchanges, which means higher selling pressure, and the sell-off from miners amplified BTCs downturn.

Ki also noted that whales began to deposit Bitcoin into exchanges once again, which happens when whales want to sell their holdings.

The price of BTC recovered swiftly after dropping to around $18,200, surging back above $19,400 within hours.

The speedy recovery likely occurred due to the nature of the drop. As the price declined, exchanges saw cascading long liquidations. As such, BTC likely dropped harder than it should have if it werent for the large liquidations.

The recovery was equally intense to the upside for that reason. Late short-sellers could have gotten aggressive as BTC dropped, leading to a short-term short squeeze.

In the near term, Bitcoin could see two major scenarios. First, it could consolidate above $19,000, which would allow the derivatives market to find composure and the open interest to rebuild.

Second, BTC could continue to drop as traders anticipate a blow-off top after achieving an all-time high.

But the macro outlook on Bitcoin still remains highly optimistic. Scott Melker, a cryptocurrency trader, emphasized that the monthly candle for November closed at BTCs all-time high, which paints a positive long-term picture for BTC. He said:

In the near term, the key support levels for Bitcoin are $18,200, $17,700 and $16,200. There are still large whale clusters in these areas, which could cause a reaction from buyers.

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3 reasons why Bitcoin price violently rejected near $20,000 - Cointelegraph

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Call it deja vu. Bitcoin topped $19,800 on Monday to reach a record and its highest level since 2017.

The digital currency has been on a tear this year and has nearly doubled since September, driven in part by new institutional support and low interest rates stemming from Covid-19.

Still, bitcoin's surge hasn't been without its trademark volatility last week, it rallied to more than $19,000 before falling to about $17,000 per coin on Friday. And, after hitting the record on Monday, it swiftly dropped again Tuesday to less than $19,000.

Even though it's become more commonplace and popular as an investment since 2017, financial advisors are still wary of the digital currency.

"It's critically important to understand the risks associated with it," said certified financial planner Douglas Boneparth, founder and president ofBone Fide Wealth, adding that it's a highly speculative asset despite encouraging headlines.

"You don't need to look too far back in time to see how volatile it can be," said Boneparth, who is also a member of the CNBC Advisor Council.

Most advisors would caution clients who want to invest in bitcoin, or any other buzzy trend.

It can be easy to have FOMO, or fear of missing out, on the latest hot investing trend, according to Roger Ma, CFP and founder of New York City-based financial planning firmlifelaidout.

It's best to keep your goals in mind before putting money into a fad investment, which could be something like bitcoin, a commodity like gold or the latest hot stock that's taking off.

That includes understanding your net worth, living expenses and credit score, said Ma. From there, he recommends assessing where you are with other prerequisites to investing do you have an emergency fund, are you paying down debt, contributing to retirement and on track for other financial goals?

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"What does your portfolio need to do to be able achieve your short- and long-term goals and for you to be able to lead your rich life?" said Ma. "If your plan relies on your portfolio returning 50% to 100% a year it might make sense to rejigger your plan to make it a little more feasible."

Also keep in mind that once something is making headlines or breaking records, it could be at the end of its run and be relatively expensive meaning it's not a good time to buy in.

"The problem is that everyone wants to buy when things are at all-time highs," said Anjali Jariwala, a CFP and CPA and founder of Fit Advisors. "We should have investment decisions driven by things that we can control versus having it driven by emotion or feeling towards certain investments."

To be sure, some people will still want to invest in bitcoin or other trendy things.

Before putting money into bitcoin, it's important to do your research and understand as much as you can about the asset class.

"Bitcoin produces no earnings, it pays no dividends, it pays no interest, so it's not really an investment in the traditional sense, it's value is purely dependent on what someone else is going to pay for it in the future," said David Oransky, CFP and founder of Laminar Wealth in St. Louis. "It's very different than investing in stocks, where you're investing in the future earnings of the company that produces goods and services."

In addition, investors should research how to actually buy into bitcoin and withdraw money, as it's not something they can get through a traditional brokerage account.

"It's still kind of the wild, Wild West out there and that should scare people that don't know a lot about it," said Oransky.

We should have investment decisions driven by things that we can control versus having it driven by emotion or feeling towards certain investments

Anjali Jariwala

founder, Fit Advisors

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Dont get caught up in the hype as bitcoin hovers around $19,000 - CNBC