Alright, let's talk crypto. You’ve been reading the hype, perhaps even jumping in with both feet. The wild west of digital finance can be a little… wild. Time to get real. To many of us accustomed to rotary phones, this new digital money still seems like a passing fad rather than a sure thing for stable investments. The SEC’s demand for crypto to be regulated might sound like just another bureaucratic yawn. It portrays a welcome foundation for market clarity and stability, as well as an opportunity for thoughtful, responsible and innovative growth.
Regulation: A Bridge, Not A Barrier
Imagine the internet during its initial years. Remember dial-up? Spam? It was a mess! It was regulation—including Content Regulation and Common Carrier Regulation—that helped the internet to grow into a form we could comfortably, productively use. That's the potential here. SEC Chair Paul Atkins gets it. He’s not anti-crypto, he’s pro-clarity and pro-friendliness to crypto policies. He sees the potential blockchain has to modernize our existing financial systems. We can all benefit from that.
Now, friendly doesn't mean a free-for-all. It could start with establishing a regulatory environment that encourages innovation to continue to thrive while protecting investors. This is not an attempt to stop the next Bitcoin. It’s a matter of making sure that the next great innovation isn’t actually a wolf in shiny new clothes.
Don't Strangle the Golden Goose
Here's where it gets tricky. Overregulation can backfire. We've seen it before. Remember the dot-com bubble? All the hype, followed by the regulatory whiplash that took some of the smartest innovations along with all the bad flippers. The same thing could happen here. If the SEC goes too far, they threaten to push legitimate crypto enterprises overseas. So does innovation, the high-quality jobs they create, and the investment they bring to communities.
Imagine that – at least $137,000 to mine one bitcoin in late 2024. That’s an overwhelming financial burden, or not. Harsh and hastily legislated regulation could in turn kill off the miners, decimating the ecosystem altogether.
The unintended consequences could be significant. Unduly burdensome regulations end up creating more avenues for criminal enterprise. Those activities then go underground, where they’re much more difficult to monitor. That's the opposite of what we want. We need a balanced approach.
Boomers Know About Stability
Having witnessed numerous market cycles, we’ve learned that provide provisions of stability are essential. The current crypto boom—Bitcoin is up 12% in a week—is thrilling. And yes, watching whales stack more crypto is attractive. As we all know, booms and busts are never a recipe for stable long-term growth. They drive qualified investors away, cause unnecessary market volatility, and at the end of the day hurt the average investor.
Just consider Senator David McCormick’s recent foray into Bitcoin ETFs. EXTREMELY ambitious of him, nonetheless, and he’s clearly seeing the potential… but he’s doing it through a regulated vehicle. And that’s the sort of thoughtful, evidence-based response we need to be animating and inspiring.
And finally there’s the trader who flipped TRUMP tokens in advance of news of a presidential dinner. Missed out on a $4.5 million gain? Ouch. That highlights the volatility and risk involved. Regulation cannot ensure profits, but it can even the playing field and protect against clear and obvious market manipulation.
Keep in mind, we don’t want to just bring back the Roaring Twenties in the digital era. We are committed to inclusive and equitable sustainable growth, responsible innovation, and a financial system that builds and sustains prosperous communities. To do so means taking a careful, deliberative, and strategic approach to crypto regulation. It’s not because they are afraid. It is about constructing a bridge to the future and together we can all cross that bridge with our heads held high. It's a chance to shape the future of finance and leave behind a stable and modern system for future generations.
