Crypto Dominance Led by Bitcoin
MicroStrategy co-founder Michael Saylor, in a recent interview with Bloomberg, suggested that regulatory enforcement actions by the United States Securities and Exchange Commission (SEC) could push the crypto industry to become more Bitcoin-focused, potentially boosting Bitcoin’s price over $250,000.
According to Saylor, SEC’s regulatory crackdown on cryptocurrencies will eventually benefit Bitcoin, as it stands out as the only crypto asset exempted from being considered a security by SEC Chair Gary Gensler.
SEC’s Regulatory Stance
Saylor added that U.S. regulators “don’t see a legitimate path forward for cryptocurrencies,” and they hold no favor for stablecoins, crypto-tokens, or crypto-based derivatives.
He emphasized that crypto exchanges would be the primary driver of this predicted price surge. He said, “[The SEC’s] view is crypto exchanges should trade and hold pure digital commodities like Bitcoin and so the entire industry is kind of destined to be rationalized down to a Bitcoin-focused industry with maybe a half a dozen to a dozen other proof of work tokens.”
Bitcoin’s Rising Market Share
Bitcoin’s market share, which increased from 40% to 48% in 2023, is a trend Saylor attributes in part to the SEC’s regulatory enforcement and their designation of 68 cryptocurrencies as securities — none of which are proof-of-work.
He foresees Bitcoin’s dominance growing to 80% as “mega institutional money” would pour into the crypto market once the “confusion and anxiety” over crypto regulations subsides.
Critics Question Bitcoin-centric Future
Despite these bullish predictions, Saylor and other Bitcoin advocates face significant criticism. Anthony Sassano, host of The Daily Gwei, criticized “Bitcoiners” who are supportive of the SEC’s lawsuits against Coinbase and other exchanges listing tokens considered as unregistered securities by the agency.
Ethereum-based wallet MetaMask’s team and others advocate for a “multichain future,” believing different blockchains serve different purposes.
Bloomberg Intelligence senior macro strategist Mike McGlone expressed concerns over a “deflationary bust” affecting the commodities market and bank deposits, suggesting crypto could be the next to fall. Similarly, economist Lyn Alden warned of a “considerable danger ahead” for Bitcoin in late 2023 due to potential liquidity issues as the U.S. resolves its debt issues.