Crackdown On Bitcoin Unlikely, But Stricter Regulations Could Follow Soon
Bitcoin has so far had a pretty wild run in 2017. Some, including Galaxy Investment Partners CEO Michael Novogratz, might admit things are getting a bit too crazy. Moreover, the CEO feels regulatory bodies have already started feeling the heat due to bitcoin’s unprecedented growth in recent months.
Government Regulations at the Doorstep
If you remember, the most famous cryptocurrency in the world started the year with a bang by surpassing $1,000 for the first time since early 2014. But what followed next caught a lot of people off guard. In the 11 months since January, bitcoin’s dollar-valuation surged by a whopping 11,100 percent. This unprecedented growth in record time eventually prompted many industry experts including Novogratz to believe that if things don’t slow down soon, more government regulations will follow.
However, he ruled out the possibility of an outright government crackdown. According to Novogratz, the government will have a challenging task in attempting to crack down on Bitcoin. It is important to note here that China and Russia, along with a few other nations, have already administered stringent barriers for bitcoin and other cryptocurrencies. Surprisingly, even these crackdowns did not affect the growing popularity and price of bitcoin by much.
Intrigued, but not Convinced
Speaking at CNBC’s Power Lunch, Novogratz outlined the fears elicited by the massive growth in the cryptocurrency:
“One of the big risks out there right now is that prices are moving so fast that regulators are going to get nervous. I could legitimately see bitcoin go $13,000, $14,000, $20,000, $25,000 and see somebody balk.”
The ex-hedge fund manager highlighted that most regulators across the world, including those in the United States, so far seem to be “intrigued” by the digital currency system.
The rise of bitcoin, while roundly celebrated by investors and crypto coin activists, has also raised some serious concerns among many world governments and economists. The riddle everyone seems to be puzzled by is when and how will this end.
Is this just a bubble inching closer to an inevitable burst or will it continue to get stamped out? Only time will tell where this scary uptrend leads.
“We’re in a speculative frenzy. Period. Stop. How long can it go? Who knows,” Novogratz said. “What’s interesting about this is it’s global.” As regulators fail to slow it down, they might soon consider delivering more massive blows to stunt its wild growth.
Despite all the uncertainties, even the harshest critic of virtual currencies cannot deny the fact that bitcoin has outgrown everyone’s expectation by almost dramatically transforming itself into a globally traded product.
Novogratz believes that while it is unlikely that the global market will use bitcoin as a currency given its volatile nature, we may be drifting towards a future where it could serve as the “digital gold.”