Bitcoin has exploded by 2021, demanding the attention of Wall Street and regulators alike.
Bitcoin price broke new ground last month for the first time in three years, rising to over $ 40,000 per bitcoin before falling slightly (although smaller cryptocurrencies continue to rise).
Now that bitcoin price is struggling to hold above $ 30,000 per bitcoin, former Goldman Sachs chief executive GS Lloyd Blankfein has warned that regulators could take action against bitcoin if it continues to grow.
Former CEO of Goldman Sachs, Lloyd Blankfein, has warned that Bitcoin’s recent success … [+]
“If I were a regulator … I’d kind of hyperventilate on Kind’s success [bitcoin] right now and I would arm myself to deal with it, “Blankfein told CNBC this week, warning against Bitcoin either as a medium of exchange or as a store of value due to the semi-anonymous nature of Bitcoin and its wild price fluctuations.
“They don’t know whether or not you are paying the North Koreans or Al-Qaeda or the Revolutionary Guards,” said Blankfein, adding that Bitcoin’s regular daily movements of 10% “make the store of value element a bit difficult.”
Bitcoin rose to a high of $ 42,000 earlier this month, but fell below $ 30,000 yesterday on fears the Bitcoin bubble could be about to burst.
Blankfein also reiterated concerns raised earlier this month by new US Treasury Secretary and former chairman of the Federal Reserve, Janet Yellen, who warned that the illegal use of Bitcoin and cryptocurrencies was “particularly worrying”.
“I think a lot [cryptocurrencies] are mainly used for illegal funding, at least in terms of transactions, and I think we really need to look into how we can limit their use and ensure that these channels are not used to combat money laundering, “Yellen told the Senate Finance Committee.
Many in the bitcoin and cryptocurrency community hit back on Yellen’s claims, arguing that illegal transactions only make up a tiny percentage of bitcoin and cryptocurrency usage.
However, as the popularity of Bitcoin and crypto increases, regulators could come under pressure to act, according to Blankfein.
“At the end of the day, though [bitcoin] Has ever grown enough to be substantial and a real medium of exchange, how could regulators so focused on combating money laundering not intervene. “Do we want this to work well in the long term,” asked Blankfein.
Bitcoin price is struggling to regain momentum this week after a strong start to the year. … [+]
Despite his warnings, Blankfein sees a path to success for Bitcoin, but thinks it means compromises must be made.
“[Bitcoin] could be doable though [regulations] will undermine the freedom and liberty and the kind of intransparency that people like in the first place, so this is the puzzle Bitcoin has to solve on its own, “he said.
Bitcoin’s strong start to the year means institutional investors are increasingly looking to cryptocurrencies, which suggests we are likely to hear more about Bitcoin from Wall Street and regulators in the coming months.
“We entered a new bull market when Bitcoin broke the $ 20,000 high in 2017, which sent a signal that institutional investors and large hedge funds are ready to bet that crypto is a real asset,” said Kay Van Petersen, Global Macro Strategist at Saxo Bankxo, said in email comments.
“The cryptocurrency is still in its infancy, the only certainty is its volatility and many different views on space and the overhang of regulatory risk.”