Bitcoin prices extended gains Monday even amid growing calls for regulation and the exodus of cryptocurrency miners from China amid the nation’s rolling power crisis.
The Biden Administration is considering a wide ranging oversight of the cryptocurrency market to combat the growing threat of ransomware and other cyber crime, Reuters reported on Friday. The oversight could include an executive order, but the White House spokeswoman did not comment on whether an executive order will be part of such oversight.
“As we’ve seen time and time again, Bitcoin recently showed strength to break the $50,000 barrier amidst global uncertainty and lagging of the stock market,” said Michal Cymbalisty, co-founder of Domination Finance.
At these prices, Cymbalisty added, “it is becoming increasingly difficult to refute that Bitcoin has finally established itself as a risk-off asset, meaning that in times of uncertainty investors turn to it like they used to with gold.”
At last check Bitcoin, the world’s largest cryptocurrency, was up 3.6% to $57,432, according to CoinDesk. Ethereum was up nearly 1% to $3,573, while Dogecoin was sliding 4.2% to 23 cents.
SEC Chairman Gary Gensler recently told Congress that he wanted crypto platforms to be registered with the agency, saying investors don’t have the benefit of that basic bargain that we protect people against fraud and manipulation.
“People are going to get hurt,” he warned.
David Lesperance managing partner of immigration and tax adviser Lesperance & Associates, said “the perfect storm of regulation is quickly becoming a Category 5 hurricane.”
“In reaction several key players in the crypto space such as Sam Bankman-Fried, Michael Novogratz, and Binance CEO Changpeng Zhao have noted the wisdom of seeking a safe regulatory port,” he said.
Lesperance added “that Crypto Exchange and other founders in this space would be wise to set up a Backup Plan to avoid becoming the next Arthur Hayes in the meantime,” referring to the co-founder and former CEO of the BitMEX exchange who is facing charges relating to the failure to implement money laundering measures.
Winston Ma, a former managing director and head of North America at China Investment Corp., said the exodus of Chinese crypto miners is accelerating, as China’s National Development and Reform Commission has included virtual currency mining as an “outdated” industry, mostly because of its energy-intensive nature, in its recent policy notice.
“Thanks to abundant energy and crypto-friendly regulatory environment, the US is the most attractive region that Chinese miners are talking about these days for potential relocation,” said Ma, author of “The Digital War – How China’s Tech Power Shapes the Future of AI, Blockchain and Cyberspace.”
Ma said that this may sound as easy as buying a summer house, but in the foreign markets, “the Chinese miners may have to deal with unfamiliar partners, unstable power supplies, and unexpected new compliance costs.”
“We think the next few months, especially with the Evergrande crisis coming to a resolution, will be very telling for the future of Bitcoin,” Ma said, noting China Evergrande Group, which rattled markets last month after the indebted property developer went to the brink of default..