A few days ago, SEC Chairman Gary Gensler was interviewed by the Washington Post about cryptocurrencies.
During the interview, he repeatedly stressed the need to regulate them, as one would expect from the chairman of one of the most important financial regulators in the US.
Regulation and the future of cryptocurrencies
One thing that came as a bit of a surprise, however, was that yesterday the well-known crypto influencer Michael Saylor, CEO of MicroStrategy, commented positively on Gensler’s interview.
All of these regulatory developments are good for Bitcoin. Volatility will decrease, public confidence will increase, and institutional and retail adoption of Bitcoin will accelerate as clarity & compliance comes to the digital asset space. #Bitcoin🚀https://t.co/Oc9x3wfHn7
— Michael Saylor⚡️ (@michael_saylor) September 21, 2021
According to Saylor, regulatory developments in this area would actually be positive for Bitcoin, because they could reduce its volatility, while also increasing public confidence and institutional and retail adoption.
All of this could accelerate as regulatory clarity and compliance becomes more widespread within the digital asset industry.
The CEO of MicroStrategy is always very bullish on Bitcoin, but he doesn’t belong to the community of anti-system anarcho-capitalists within which Bitcoin was born.
He co-founded the company 32 years ago and has always operated it within traditional financial markets and within US financial regulations.
His statement about Bitcoin’s growth prospects in the event of regulation may well be true, depending on what those regulations are like.
Differences between assets and speculative limits. The policy of the Fed
Bitcoin is one thing, while the other cryptocurrencies concern a completely different dimension, with very little in common, especially in relation to the path of growth and spread (only Ethereum and very few others).
In the interview with the Washington Post, Gensler spoke in separate terms about stablecoins, which need specific rules in order to be standardised, and also about security tokens, i.e. digital assets that are not simple payment tokens like BTC and ETH.
He also raised an issue with regard to disintermediated lending in decentralized finance, i.e. those that earn significant APY on DeFi platforms.
Gensler also argues that cryptocurrencies are unlikely to replace traditional fiat currencies and that cryptocurrencies are often speculative assets.
Against such a complex backdrop, other analysts also argue that good regulation on payment tokens such as Bitcoin could benefit not only its spread but also its value.
According to GSR’s Global Head of Trading, Anthony Vince, the main threat to cryptocurrency growth at the moment is the lack of regulatory clarity, because more clarity would allow institutions to enter this market without problems, as they are used to following very strict rules.
Vince also says that the Fed’s monetary policy is less impactful in this regard than regulatory clarity because there is a lot of capital swirling around crypto right now.
He then mentioned that September and October are usually highly volatile months, after returning from the summer break, declaring that he sees the price of BTC pushing to get back around the $50,000 mark.