Michael Saylor, CEO of MicroStrategy and one of the biggest BTC investors in the world, called on regulators to exercise their power over altcoins. That is, the executive asked the government to regulate all cryptocurrencies.
According to Saylor, the nearly 20 alternative cryptocurrencies to BTC should be classified as “unregistered securities”. This definition would have the impact of expanding restrictions for users and companies to trade and even create other cryptocurrencies.
CEO of MicroStrategy called the proliferation of altcoins a “parade of horribles”, and argued that they harm BTC itself.
According Saylor Bitcoin Faces Crossfire
Saylor’s remarks were made during a podcast with Sven Henrich, founder of NorthmanTrader. Henrich touched on the topic of the recent market crash, which severely affected the price of BTC. With this, the cryptocurrency has accumulated losses of almost 30% in the last few days.
In his response, Saylor said that BTC was caught in the crossfire of a collapsing cryptocurrency market. He stated that the problem lies in the fact that several protocols have given BTC as collateral to buy less-proven tokens.
However, token prices have dropped sharply, forcing investors to liquidate their investments. When this happened, many had to sell BTC, increasing selling pressure.
“What you have is a $400 billion cloud of opaque, unregistered securities trading without full and fair disclosure. And they are all cross-guaranteed with BTC,” Saylor argued.
Next, Saylor said that is why the institutional market no longer invests in BTC. After all, the alleged “unregistered securities” present themselves as a risk associated with cryptocurrencies. In other words, the bad reputation of altcoins would affect the performance of BTC.
An example of this view is the speech of well-known investor Nouriel Roubini, one of the few to have predicted the 2008 crisis. Over the weekend, Roubini described the fall in this market as a “Ponzi scheme collapsing under its own weight”.
So it’s attitudes like these that make Saylor believe that regulators should and eventually intervene. Interestingly, the executive was a big critic of government intervention in the free market during the pandemic, as well as advocating freedom when it comes to BTC.
The parade of the horrible
In his speech, Saylor used examples from the traditional market to justify his position. In this regard, he said that even strong multinationals like Apple would see more volatility in their share prices if there were no regulations.
Market rules allow, for example, the occurrence of practices such as wash trading. This practice occurs when an investor negotiates the purchase and sale of assets in portfolios owned by him.
That way, if the investor has a lot of money, the asset registers a spike in volume. But this volume is artificial, moved only by this operation. Wash trading raises market prices without real demand for the asset.
He cited cryptocurrency hedge funds such as Three Arrows Capital (3AC) as obstacles rather than facilitators to cryptocurrency adoption.
“The general public shouldn’t buy unregistered securities from wild bankers that may or may not be there next Thursday,” said Saylor, whose company owns 129,218 BTC at the end of March.
3AC is at risk of bankruptcy, in part due to a failed bet on the value of Terra (LUNA), the governance token that backed the TerraUSD (UST) stablecoin. When the stablecoin collapsed, the value of LUNA turned to dust.