The recent price slump of bitcoin and a host of other altcoins have not wavered its enthusiasts and preachers in proclaiming the enduring power in changing the way we do business and spend money. The proliferation of bitcoin wallets, the 576% increase in sales of cryptocurrency on the best crypto exchange platforms are signs, despite the dip that doesn’t seem to want to recover, that the cryptocurrency industry is here to stay, and stay for a long time.
Michael Saylor, CEO of microstrategy, a company that provides users and customers with business intelligence and analytics, says that the future of bitcoin is bright, and that he believes the blockchain-inspired currency is technically, politically, and economically sound.
While there are many who would agree with Saylor’s opinion, there are many reservations on the viability of bitcoin, especially given the recent price dump.
Bitcoin has seen a sudden surge in adoption even with the fall in bitcoin price. Companies are buying bitcoins in their millions, and this, when analyzed carefully, spells better days for the number one cryptocurrency industry.
Only recently, Warren Buffet invested a whopping $1billion in NeoBank, a pro-bitcoin bank. His financial support shows that one of the best investors in the world believes in bitcoin’s values and thus invested in it.
However, the sentiment isn’t as strong among everyday traders and investors.
The drop in price from as high as $67,000 in October 2021 to as low as $35,000 as at the time of this writing, makes many sceptical about the currency.
While the recent attacks on DeFi platforms aren’t on bitcoin or any of the top cryptocurrencies with high market caps, there are brewing sentiments across various quarters that bitcoin, and cryptocurrency in general, may not be the currency-saviour that many had hoped for.
The conversation around bitcoin and digital currency circles have been about regulation. The regulators are constantly bringing out the dogs, many investors believe, to take over bitcoin. The beauty of bitcoin is its decentralisation and how the government has no power over its use, distribution and supply.
However, over the last few years, regulatory bodies have been searching for ways to regulate the space, claiming the space’s lack of regulations is detrimental to its growth and sustenance in the coming years.
And with more institutions and business gurus investing in bitcoin and other cryptocurrencies, it is only normal that some clamour for regulations to be implemented.
Michael Saylor very well welcomes regulators into the cryptocurrency space.
Saylor says that cryptocurrency is without a clear definition, a statement that hasn’t sat down well with some crypto enthusiasts.
According to him, many people aren’t sure what bitcoin is, and what bitcoin exchange represents.
Yes, it is decentralised, he agrees, but a lot of vagueness still persists on what bitcoin is.
Is it a store of value?
Is it a digital currency?
What are the regulations guiding crypto exchange platforms such as https://redot.com? Do they operate however they want or must be regulated under special crypto-related laws?
Are there even cryptocurrency-specific laws?
These questions are Saylor’s reason for calling the regulators to become more involved in bitcoin and lay down rules and regulations for cryptocurrency.
The cry from Michael Saylor is not far fetched given how sceptical many have been about investing in crypto. The giant strides that crypto has taken is without its naysayers who don’t believe the cryptocurrency will be here for the long haul. According to the crypto investor, with regulators involved, more institutions will adopt bitcoin.
Institutions adopting bitcoin will mean that adoption will spread faster, and its spread will eventually make bitcoin a legal tender in many parts of the world; many businesses might start accepting bitcoin for payment.
Also, Saylor’s concerns on the proper definition are worth taking a critical look at.
There is no clear cut definition of what bitcoin is. Many believe it is a store of value, others are sure that it is a digital property.
Which is it?
We can’t make progress in the adoption of bitcoin if these grey areas persist. While decentralisation is an amazing concept, the recent attacks on OpenSea and other DeFi platforms are raising the alarm bells. Many aren’t sure that they have, and if what they own is a currency or a digital asset.
Many of the institutions buying bitcoin believe it is a store of value, just like Gold and Silver. However, some believe that bitcoin should be used to pay for goods and services, as some countries are currently doing.
If these definitions aren’t clearly spelt out, there is a high possibility that we will remain in the realm of uncertainty for a long time, and thereby slow its adoption.
However, the reality on ground – and history backs this reality firmly – is that bitcoin’s adoption is the fastest adoption of any technology in recorded human history.
So, if bitcoin and blockchain technology is being adopted this fast, will a definition of what bitcoin is and all the unclear areas make things any faster?
Will people be more interested in adopting bitcoin if the regulators put clear cut definitions to these things?
Or is the need for regulatory bodies being involved with bitcoin and cryptocurrency for the benefit of uncertain institutions?
If bitcoin and cryptocurrency was developed for the ordinary man out there seeking to have financial freedom, isn’t the aim defeated if regulators are involved and controlling the system?
These questions, and more, are what bugs many investors; that’s why regulators entering the space are frowned upon.
But we can’t dismiss the type of influence regulators have on bitcoin adoption.
The approval of Spot ETF encouraged more investors to buy and invest in bitcoin. Even with the slump in bitcoin price, the stats shows that many rich families, 77% of family offices, are buying bitcoins, and for those families that aren’t buying, there are plans to buy.
So, it is safe that Saylor’s concerns are valid.
While bitcoin is sound economically, technically and politically, there is a need for some form of regulation to help sustain its value in the future. Agreed, the currency is still relatively new, and there will be mistakes made in formulating and implementing regulations, but with an open mind, we expect that regulators will help sanitise, somewhat, a near scatterbrained space.
