The Biden administration’s plan to put more regulation on bitcoin and other cryptocurrencies may end up being a good thing for the blockchain. The optimism was from Tom Jessop’s comments in an interview with CNBC last week. Jessop is the president of Fidelity Digital Assets and the head of Corporate Business Development for Fidelity Investments.
The crypto ecosystem expects more government involvement following comments from the new Treasury Secretary. Janet Yellen remarked that cryptocurrencies were a favored payment method for illicit activities and, in this regard, require more regulation. The fear of strict measures caused a considerable fall in bitcoin’s value, as it hit its lowest in three weeks.
However, Jessop is assuring the market, claiming that regulation may increase demand for bitcoin from institutional buyers. Bitcoin regulation would not be an attack on blockchain technology, as critics earlier assumed. Jessop emphasized his optimism by noting Biden’s pick for the U.S. Securities and Exchange Commission (SEC), Gary Gensler. Gensler is an MIT blockchain professor. Thus, according to Fidelity Digital Assets president, his appointment paints a constructive attitude in what the community can expect for the future.
Jessop also believes that the previous administration’s favorable regulations will persist even in Biden’s term. Contrary to Yellen’s remarks, crypto crime was only 0.34% of all crypto transactions last year. The data indicates that crypto’s crime rate is very low to warrant bitcoin regulations that will interfere with its value. Moreover, Jessop opined that the crime risk in crypto would continue to decrease, thus creating more industry optimism.
More Institutional Demand for Bitcoin
Jessop acknowledged the recent price fluctuations of Bitcoin. He, however, stated that what is currently happening is very different from the 2017 retail-driven market. The present market is more mature, more liquid, and less volatile by around 50%. Fidelity Digital Assets has continued to enjoy a steady number of institutional clients throughout the price movements with these features.
Examples of more institutional demand for bitcoin are seeing service providers like Fidelity in the blockchain business, and there is more interest in futures exchanges. Jessop also highlighted Blackrock’s announcement to put some of their funds into bitcoin futures.