In a recent Bloomberg interview, MicroStrategy co-founder Michael Saylor expressed his belief that regulatory enforcement actions targeting cryptocurrency firms in the United States will ultimately benefit Bitcoin, propelling its price to reach new heights. Saylor, a well-known Bitcoin advocate, highlighted the unique position of Bitcoin as the only cryptocurrency excluded from being classified as a security by SEC Chair Gary Gensler.
According to Saylor, U.S. regulators currently lack a clear path forward for cryptocurrencies, displaying little enthusiasm for stablecoins, crypto-tokens, and crypto-based derivatives. Instead, he suggested that the regulatory landscape would rationalize the industry towards a Bitcoin-focused market, accompanied by a select few other proof-of-work tokens.
Saylor further emphasized that the recent enforcement actions by the Securities and Exchange Commission (SEC) would serve as a catalyst for a significant surge in Bitcoin’s price. He explained, “[The SEC’s] view is crypto exchanges should trade and hold pure digital commodities like Bitcoin and so the entire industry is kind of destined to be rationalized down to a Bitcoin-focused industry with maybe a half a dozen to a dozen other proof of work tokens.” Saylor projected that Bitcoin would experience a tenfold increase in value from its current level and then another tenfold increase in the future.
One possible indication of Bitcoin’s growing dominance is its increased market share, rising from 40% to 48% in 2023, as Saylor attributed it in part to the SEC’s enforcement activities and the agency’s classification of 68 cryptocurrencies as securities, none of which are proof-of-work tokens. Looking ahead, Saylor predicted that Bitcoin’s market share could climb even higher to 80%, driven by substantial institutional investment once the confusion and anxiety surrounding crypto dissipate.
Despite Saylor’s optimistic outlook, he has faced criticism in the past, especially during the November 2022 crypto market downturn triggered by the FTX saga. Nevertheless, historical data shows Bitcoin’s resilience compared to traditional indices. From August 10, 2020, until the present day, Bitcoin has outperformed the S&P 500 and Nasdaq, growing by 40% while the S&P 500 and Nasdaq recorded growth rates of 18% and 2%, respectively.
The correlation between Bitcoin and traditional indices, such as the Nasdaq, has been an area of interest. Some analysts argue that recent trends suggest a loosening correlation, while others remain cautious. Markus Thielen, Matrixport’s Research and Strategy Head, noted that based on the historical relationship with tech stocks (Nasdaq), Bitcoin’s price should have surpassed $30,000. However, the lack of large outstanding shorts in Bitcoin could lead to a potential divergence between the two.
MicroStrategy’s long-standing support for Bitcoin has been evident, with CEO Michael Saylor previously stating that their high bet on Bitcoin, even resorting to the debt markets to back it, represents the “highest upside, lowest risk approach” the company can pursue.
As the regulatory landscape evolves and enforcement actions target cryptocurrency firms, Bitcoin’s resilience and unique position as a non-security crypto asset continue to draw attention. The potential rationalization of the crypto industry into a Bitcoin-focused market, along with the loosening correlation between Bitcoin and traditional indices, sets the stage for an exciting period of growth and development in the wider crypto sector.