Former SEC Official Cites Regulatory Oversight and Greater Fool Theory, Dismisses High Likelihood of Bitcoin ETF Approval
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According to John Reed Stark, a former SEC official, there are two main reasons why cryptocurrency prices, like Bitcoin, are going up. First, he talks about the rules and oversight that the government puts on the crypto industry. If there’s more control and clear rules, people feel safer investing, which can boost prices. In the meantime, the second reason is called the “greater fool theory.” This means people believe they can sell the cryptocurrency to someone else at a higher price, even if it doesn’t have a clear value.
Why Are #Crypto Prices Up? Former #SEC Official Says There Are 2 Reasons https://t.co/pT0MjKx7ym
— The Witness (@TheWitness73866) December 6, 2023
John Reed Stark also thinks it’s ridiculous to say there’s a 90% chance the SEC will approve a Bitcoin ETF. He disagrees strongly with this high probability. Stark, who used to work at the SEC, shared his thoughts on social media, pointing out these factors influencing crypto prices. He now works in cybersecurity, bringing his experience to a new field.
Stark’s Skepticism: Cryptocurrency Doubts and Regulatory Concerns
As we all are well aware Stark has consistently been doubtful about Bitcoin and cryptocurrencies. He recently praised the resolution between Binance and U.S. authorities, considering it a big win for the SEC. In August, he anticipated significant changes in crypto regulations after the U.S. presidential election.
Stark doesn’t like the idea of a central bank digital currency (CBDC), calling it a “ridiculous financial concept.” He warned that the recent crackdown on crypto regulations is just the beginning, expressing worry about the future of digital currencies and how they’ll be regulated.
Therefore, Stark’s skepticism and concerns about cryptocurrency regulations, along with his criticism of a central bank digital currency, will likely contribute to market uncertainty, potentially influencing a cautious approach among investors and impacting cryptocurrency prices.
Crypto Momentum: Big Investors and Companies Embrace Bitcoin Despite Stark’s Doubts
While Stark is not a fan of crypto, more and more big investors and important companies are getting into it, especially Bitcoin. Microstrategy, a smart software company, now has a whopping 174,530 bitcoins, making it a cool $1.6 billion in profit. A famous investor, Paul Tudor Jones, really likes Bitcoin and thinks its price will go way higher than it is now. Even a super-rich guy, Stan Druckenmiller, admitted he should have some Bitcoin, even if he doesn’t have any yet.
Standard Chartered Bank says bitcoin could hit $100,000 faster than they thought. The boss of Blackrock, the world’s biggest money manager, is also interested in crypto. He thinks people all over the world want it. Big companies, including Blackrock, are asking the government to let them start special bitcoin investments. So, even though Stark is unsure, many others are jumping into the crypto game.
Therefore, the increasing interest and investment from big companies and influential investors, such as Microstrategy, Paul Tudor Jones, Stan Druckenmiller, Standard Chartered Bank, and Blackrock, could potentially boost confidence and drive up cryptocurrency prices.
