By Yasin Ebrahim
Investing.com -- Bitcoin surged Wednesday after President Joe Biden signed an executive order to review the U.S. approach to cryptocurrencies that some say could spur adoption by legitimizing it as an asset class and provide investors with a long-awaited framework to assess the popular cryptocurrency.
Bitcoin surged 8% to $41,956.
The order seeks to develop a national policy for digital assets, and tasks several Federal agencies to review the risks and opportunities posed by cryptocurrencies and explore ways to regulate them.
“The fact that this is even taking place legitimizes bitcoin as an asset class because it’s the US government recognizing the importance of the change that is inevitably going to take place as a result of bitcoin,” Dan Weiskopf, Co-Portfolio Manager of the Amplify Transformational Data Sharing ETF (BLOK) said in an interview with Investing.com on Wednesday.
A good place to start on the path to regulation would be definition. The ambiguity of not knowing what you own, whether is it defined as a security or utility token, has long troubled investors.
“The whole concept of cryptocurrency as a broad definition, across so many different things is confusing,” Weiskopf said.
The idea of big government making a foray into crypto regulation isn’t likely to be welcomed by the Bitcoin purists, or so-called maximalist. They argue that government meddling goes against the thesis of bitcoin as an alternative payment system with no government involvement.
But the purists may have to accept that for bitcoin to fulfil its potential as an alternative payments system, user adoption holds sway. Clarity, or guidance on how to assess bitcoin and other cryptocurrencies will help do that, and ultimately drive adoption.
“My hope would be that some of these folks, who call themselves maximalists, will be pragmatic about it [regulation], because for the utility value, whether it's for Bitcoin, Ethereum, or the asset class in general, more acceptance is simply going to be better,” Weiskopf added