Crypto Market Continues to Be Volatile While Regulation Debate Rages On
Posted On March 22, 2018
This article contains commentary which reflects the author's opinion
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Bitcoin Garners Attention from Major Investors
Since its release in 2009, Bitcoin has garnered a lot of scrutiny and interest, but only in recent months has it gotten the attention of major investors and the mainstream media. The Securities and Exchange Commission has especially taken an interest in Bitcoin, and the platforms used to buy and sell them, saying they are considered securities, thus urging them to register with the agency. This request has been received with much pushback.
Bitcoin is a cryptocurrency, introduced in 2009 by Satoshi Nakamoto, whose identity is still a mystery. Theories as to who he is have been thrown around for a few years. Some say he is Elon Musk or Gavin Andresen or, perhaps, a group of programmers. Some have even suggested it was created by a rogue AI (Artificial Intelligence.) Regardless of who it is, along with its release, came the invention of the blockchain. Essentially, the blockchain is a public network that shows how much bitcoin one wallet ID has sent to another. Bitcoin is the largest cryptocurrency by market cap: $21 million.
Cryptocurrency Was Intended to Be Free of Government Control
What attracts people to crypto is the fact that it is not hindered by a 3rd party, government, or corporation. Bitcoin transactions are stored in a public, immutable ledger, which shows all transactions between wallets. From that information, one can quickly determine the balance of any wallet ID, but not who owns it. This was the intent when created, avoiding government or corporate involvement, but the SEC is now urging that the users of these exchanges push the platforms to comply and register with the SEC.
Spencer Bogart of Blockchain Capital is a bit annoyed with this, saying, “The SEC continues to draw a line in the sand between securities and non-securities, but without going so far as to name names. Of all crypto assets, Bitcoin seems least likely to be deemed a security — by a long shot.” When the SEC announced they were interested in increased regulation, Bitcoin fell by 10%.
There’s still a lot of speculation as to whether the securities laws apply to digital currencies. Many firms have had to rely on self-disclosure and lawyers in order to set themselves apart from scams and ease any anxious, interested parties.
Should Crypto Currencies Be Regulated?
At the end of the day, it is completely up to the public as to what happens next. The users of these trading sites will dictate whether these sites comply with the SEC. There are many crypto investors who would believe having this kind of government regulation would completely defeat the purpose and go against everything the creators of these currencies had in mind, while others think it would change the direction of crypto for the better.
Everyone’s favorite late-night host, John Oliver ran a segment on his show comparing the rise of cryptocurrency to the craze of buying beanie babies. While educating oneself before investing in anything is always a good idea, taking investment advice from a late-night nu-male is probably not a good idea.
With cryptocurrency still being a fairly new concept, it would make sense that some would want the government to step in. Many other countries, such as China are reportedly planning on blocking any website that offers cryptocurrency trading. These governments, though, have been able to feed off the ignorance of their citizens and suffocate this new branch of the free market. Not uncommon in a communist country. So, now the question for the SEC is this: Is Bitcoin more like stocks or government bonds? Alternatively, is Bitcoin more like art, gold, and diamonds in terms of investments?
The only way to answer that question at this point is to see how these investors and platforms respond to the SEC’s attempt at control.
Landon Jordon is a father, moderate Libertarian, and ordained Christian minister. His life has been a whirl of excitement but he is proud of the fact that he has never been to a Kid Rock concert.