The U.S. Securities and Exchange Commission’s former head of internet enforcement believes that there are two reasons why crypto prices are up. The first concerns regulatory oversight of the cryptocurrency industry, while the second revolves around the concept of the greater fool theory. The former SEC official also dismissed the reported 90% likelihood of the SEC approving a bitcoin spot ETF as “absolutely absurd.”
Stark Explains Why Crypto Prices Are Up
Former U.S. Securities and Exchange Commission (SEC) official John Reed Stark shared his view on why the price of bitcoin has rallied in a lengthy post on social media platform X Monday. Stark is currently president of cybersecurity firm John Reed Stark Consulting. He founded and served as chief of the SEC Office of Internet Enforcement for 11 years. He was also an SEC enforcement attorney for 15 years.
The former SEC internet enforcement chief detailed:
Crypto prices go up for two reasons: First, because there is no regulatory oversight to prevent market manipulation and second, because people are able to sell hyped, FOMO’d and overpriced crypto to a ‘greater fool,’ whether or not the crypto is overvalued.
He then cautioned that when “there are no greater fools left,” it will all come “crashing down.”
Continuing his criticism of crypto, he claimed: “For crypto: There’s no inherent value. There’s no cash flow. There’s no yield. There’s no employees. There’s no management. There’s no balance sheet. There’s no product. There’s no service. There’s no history of operations. There’s no analytical valuations. There’s no earnings reports. There’s no proven track record of adoption or reliance. There’s no data of any kind except for analytics relating to crypto speculation, which are inherently suspect (e.g. the reported 90% likelihood of the SEC’s approval of a bitcoin spot ETF, which is absolutely absurd).”
Stark’s long-standing skepticism toward bitcoin and cryptocurrency has been unwavering. He recently hailed the settlement between crypto exchange Binance and U.S. authorities, including the Department of Justice (DOJ), as a “huge victory” for the SEC. In August, he predicted exponential shifts in crypto regulations following the upcoming U.S. presidential election. He also holds a dim view of central bank digital currency (CBDC), labeling it “the most ludicrous financial concept in existence.” Earlier this year, he cautioned that the current regulatory crackdown on crypto is just the beginning.
In contrast to Stark’s skepticism, a growing number of investors, including prominent figures and institutions, are embracing cryptocurrency, particularly bitcoin. Software intelligence firm Microstrategy (Nasdaq: MSTR) recently disclosed that its BTC holdings have ballooned to 174,530 bitcoins, generating a staggering $1.6 billion in profit. Investing legend Paul Tudor Jones has been a vocal proponent of bitcoin, predicting in October that its price will significantly surpass current levels. Renowned billionaire hedge fund manager Stan Druckenmiller acknowledged that he should own bitcoin, despite not currently holding any. Standard Chartered Bank has updated its bitcoin outlook, stating that the price of BTC could reach $100,000 sooner than initially anticipated. Blackrock CEO Larry Fink echoed the growing interest in cryptocurrency, stating in October that he sees global demand and pent-up interest in crypto. The world’s largest asset manager is among the companies that have filed applications with the SEC to launch spot bitcoin ETFs.
What do you think about the explanations by former SEC internet enforcement chief John Reed Stark regarding why crypto prices have surged? Let us know in the comments section below.
from Bitcoin News https://ift.tt/2IUWbOl
