During an event called ‘The Year ahead for Capital Markets,’ the two regulatory bodies of the United States, SEC and CFTC, came together at the Bipartisan Policy Center to voice their positions on Bitcoin futures contracts and Bitcoin exchange-traded funds [ETFs].
SEC has a history of rejecting many ETF submissions on numerous occasions and even delaying many proposals until they were withdrawn. This year too, filings have not gained any momentum in the approval process.
The commissioner of the US Securities and Exchange Commission [SEC], Hester Peirce, admitted at the event that the SEC is yet to understand how the entire space works. The regulatory body has been reluctant to approve Bitcoin ETF filings and has not been able to provide a strong ground to back up the action. Peirce said:
“At the SEC we’ve been unwilling to sign off on a Bitcoin ETF, an exchange-traded product based on Bitcoin. My concern about our approach in that area is it looks a little bit like a merit-based approach judging the underlying bitcoin markets.”
Talking about the unregulated nature of the cryptosphere, Peirce stated:
“There are lots of markets that aren’t regulated but we nevertheless build products on top of them.”
She further asserted that there is a need to rigorously assess susceptibilities and apply reasoning in the sector.
Addressing the tumultuous phase of Initial Coin Offerings [ICOs] at the Bipartisan Policy Center, Peirce stated that it is normal at the beginning of any trend. She further pointed out the need to do a thorough background research of the people behind the ICOs, as well as a deeper understanding of their whitepapers.
Hester Peirce had previously earned the tag of ‘crypto mom’ for being critical of the Bitcoin [BTC] community.
Commodity Futures Trading Commission’s Brian Quintez too voiced his opinions on the subject. Discussing crypto regulations at the event, he suggested that jurisdiction was required to mitigate the chances of the contracts being vulnerable to any fraudulence.
The commissioner further claimed that the CFTC has fraud and enforcement jurisdiction only in the commodity space. Hence, he advised entities to form a unified self-regulatory structure with certain standards for the purpose of discussion, implementation, and examination of ICOs.
Additionally, Brian also talked about a process of self-verification of contracts in the Commodity Exchange Act wherein regulatory agencies can approve or disapprove a contract within a stipulated time period called the review period.
In the case of the former, the contract can be self-certified by the exchange seamlessly. The CFTC commissioner further confirmed that even if the contracts are not granted a green light, the CBOE and the CME can still pursue the self-certification course.
Hester Peirce also spoke about the possibility of a collaboration between the two agencies. She argued that the current state of the digital market space was perplexing and said:
“There [are] questions about where your jurisdiction ends and ours begins and again we don’t want to have overlap there so you know my main concern has been that I think we need to do a better job providing guidance.”
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Bitcoin will likely be valued at $100,000 with a market cap of over $2 trillion before the end of 2021
The entire cryptocurrency market seems to be on the brighter side of the market since the beginning of the year. A majority of the coins have recorded significant recoveries from their 2018 slump, a period during which most coins lost over 90 percent of their value, when compared to their all-time highs. Among all the coins in the market, Bitcoin [BTC] aka the digital gold, was noted to be making a massive comeback as the coin breached the $11,000 mark after nearly 15 months. The coin however, soon retracted to settle below the $11,000 level.
According to CoinMarketCap, at press time, Bitcoin was trading at $10,887.27 with a market cap of $93.549 billion. The coin recorded a 24-hour trading volume of $20.757 billion for the past 24 hours and saw a massive rise of over 17 percent over the past seven days.
Anthony Pompliano, Co-founder of Morgan Creek Digital Assets, predicted that the largest digital currency could rise to reach $100,000, before the end of 2021. Pomp added that he was around 70-75 percent confident in this prediction. He stated,
“As I have previously said, making predictions is difficult […] Part of my process as a professional money manager is forming a thesis (price target), identifying a timeline (date), and establishing a confidence level. And then constantly re-evaluating those three aspects of my thought process as I receive new information.”
Pomp however, listed six pointers that have to be understood beforehand. First, this prediction is not an investment advice, and people should do their own research before investing in the digital currency. The second is with respect to Bitcoin’s volatility, with Pomp remarking that since it was a highly volatile market, the coin could witness a significant fall before being valued at $100,000. He stated,
“I anticipate that there will be numerous 20-30% drawdowns from new all-time highs as the asset continues to appreciate in value. These mini-boom/bust cycles should not cause panic, but rather need to be understood as natural market dynamics whenever an asset gains significant value in short periods of time.”
Further, the partner of the investment firm stated that the rise would be driven by several catalysts. This includes institutional adoption, exchange-traded funds and retail product approvals, global instability, governments all across the globe manipulating currencies, markets and economy. He went on to state,
“The market cap of Bitcoin will reach $2+ trillion when Bitcoin is worth $100,000. This is less than 1/3 the market cap of gold and less than 1/40 the global money supply.”
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