Key Takeaways:
Prominent Bitcoin advocate Samson Mow has expressed skepticism about the increasing support shown by politicians for cryptocurrencies. He warned that the narrative shift was temporary since the characteristics of Bitcoin and other cryptocurrencies are entirely different, which may cause issues in the future.
Samson Mow Warns About Politicians’ Pro-Crypto Stance
In an X thread reposting Senator Cynthia Lummins’s tweet, the chief strategy officer at blockchain technology firm Blockstream said that without properly adhering to the true principles of Bitcoin and differentiating it from other digital assets, the current political support for cryptocurrencies could lead to financial disasters similar to FTX, Terra/Luna, Genesis, or Celsius.
He highlighted that Bitcoin, with its decentralized, permissionless, and censorship-resistant nature, stands out from the rest of the crypto market, which has assets with different characteristics and risk profiles.
Mow said that while the situation “feels nice”, given the hostile anti-crypto stances by politicians in the past, it will be bad for Bitcoin in the long term and users will be the ones paying for it.
Mow Stresses the Need to Differentiate Bitcoin from Rest of the Crypto Market
He stressed the need for differentiating Bitcoin from other crypto assets, instead of lumping them all together under a single ‘crypto’ umbrella that could eventually lead to misinformed policy decisions and regulatory frameworks that fail to address the unique nature of Bitcoin.
Mow has called for developing specific regulations for Bitcoin that consider its unique properties and potential benefits. He argued that treating the apex cryptocurrency like any other digital currency could stifle innovation and hinder the growth of blockchain technology.
While replying to one of his followers, Mow reiterated that he knew Senator Cynthia Lummis, who he said is passionate about Bitcoin. Lummis is a known crypto advocate and has revealed that she owns 5 BTC, valued at $343,539, and her son-in-law is a Bitcoiner.
The senator has been the industry’s biggest voice in Congress, calling for lawmakers to agree on establishing robust crypto regulations in the US. She urged for clarity on crypto property rights and self-custody, arguing that the current landscape does not adequately safeguard crypto holders.
US Lawmakers Pass First-Ever, Far-Reaching Regulatory Framework for Crypto Assets
Lummis’s efforts didn’t go in vain as last week the House of Representatives passed the Financial Innovation and Technology for the 21st Century Act (FIT21), which is the first-ever major crypto regulation to be established in the United States.
FIT21 is set to introduce new standards for crypto consumer and investor protection and will assign the Commodities Futures Trading Commission (CFTC) as the industry’s premier watchdog. The regulator will determine the nature of a cryptocurrency as a security or commodity.
Another major turning point was the US Securities and Exchange Commission (SEC) reversing the SAB 121, which placed harsh conditions on financial institutions that wished to become crypto custodians.
Former President and leading candidate for the White House, Donald Trump, recently expressed his support for cryptocurrencies and related entities. He has promised to support crypto firms and will help the industry prosper in the country if he returns to the presidency.
The Trump campaign has also begun accepting donations in Bitcoin and other cryptocurrencies, ensuring his vote of confidence for the digital assets.
Meanwhile, the Biden administration is steadfast in banning cryptocurrencies. Last week, the White House produced a statement calling out the FIT21 bill, arguing that it lacks sufficient protections for consumers and investors.
SEC chairman Gary Gensler also strongly opposes the new crypto bill, saying it was unnecessary and endangered existing federal securities regulations. Gensler claims the FIT21 would create regulatory gaps and put investors and capital markets at “immeasurable risk”.
SEC Greelights Spot Ethereum ETFs in the US
Despite the opposition, the SEC took an unexpected u-turn by approving eight exchange-traded funds (ETFs) backed by Ether (ETH) – the second-largest cryptocurrency by market capitalization.
Earlier last week, the securities watchdog asked exchanges including Nasdaq, CBOE, and NYSE to submit updated 19b-4 forms from issuers of the crypto investment fund. Market experts believe the ETF tracking the market price of ETH could be listed for trade in less than 100 days.
Just like the spot Bitcoin ETF, the Ethereum ETF can call on some Wall Street heavyweights as its proponents. Asset managers including, BlackRock, Fidelity, Grayscale, ARK Invest, Invesco, and Franklin Templeton have submitted their proposals for a spot Ethereum ETF.
The spot Bitcoin ETFs have been a major hit on Wall Street, racking in nearly $13 billion in net inflows since they began trading in January 2024. It is considered to be the fastest-ever ETF to hit a billion-dollar valuation.
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