The digital currency market may experience significant regulatory lucidity by 2021. In an unrivaled move, the SEC Commissioner; Hester Peirce at the recent International Blockchain Congress in Chicago suggested that tokens require a three-year grace period before being scrutinized under the SEC’s securities evaluation criteria. These kinds of developments arrive when the cryptocurrency industry has gained more fame and acceptance after going mainstream. Such a development has been highlighted by Grayscale Investments’ Michael Sonnenshein during a recent interview.
Further evidence of the SEC assuming a bold role in the cryptocurrency sector, the authority recently recognized the Grayscale Bitcoin Trust as an SEC reporting company. This marks the first time a cryptocurrency investment firm attaining such a status.
The Managing Director of Grayscale investments, Michael Sonnenshein in a recent interview with CNBC; spoke about Bitcoin and the other digital assets. He noted what regulatory alterations mean to the cryptocurrency ecosystem; in particular, for the institutional investors exploring to invest in decentralized digital currencies like bitcoin. In addition, Sonnenshein said:
“Grayscale Bitcoin Trust becoming an SEC reporting company really should signal to the community that our regulators are really willing and able to engage with the digital currency asset class”
According to him, SEC’s approval of Grayscale’s Bitcoin Trust makes the firm similar to any other public firm or “Exchange-traded Product or any other financial instrument that investors are using.”
Bitcoin is a Safe Haven
Additionally, the Grayscale Managing Director highlighted what he thinks bitcoin represents. He said:
“First and foremost Bitcoin is now a safe haven, a store of value, when there are dislocations in the market and investors can really think about that role, which gold and bonds, quite frankly, used to occupy. Now, Bitcoin is part of that conversation”
Moreover, as bitcoin advocates continue glorifying the digital assets as a store of value and a safe haven asset, market research data supports the claims to a certain extent. The latest report on the State of Adoption focused on uncertainty indexes regarding the economic and political catalysts. It suggested that a link does exist to a certain level. However, it still remains mostly indecisive.
Moving forward, during the interview Sonnenshein further noted that at this point, Grayscale has increased focus on the derivatives market surrounding the asset class and is fairly positive regarding Bitcoin’s position as a digital asset. He added:
“The fact that we now have Futures and are seeing the incumbents, the fidelities, the CME Group, Square, Robinhood, all these types of companies getting involved in the space, it really lends itself to validation that the asset class is here to stay.”
Demand for Bitcoin Rises during Times of Global Uncertainties
As we noted during the start of the year when tension grew between the United States and Iran, Bitcoin showcased its ability as a “wartime safe haven” as it rose over 20 percent. An info-graphic by Messari at the time indicated how the demand rose after the assassination of the Iran General. The surge in interest saw Bitcoin rise up from $6,960 on January 2; to a high of $8,440 on January 8.
In conclusion, Bitcoin offers an escape like foreign currency does in moments of inflation and turmoil. When economic turmoil arises, investors can start purchasing Bitcoin to store their savings and protect their wealth. It becomes a borderless currency that they can count on during times of crisis.