One expert says the price of Bitcoin is rising on hopes of looser regulations following Donald Trump’s election victory, but he has concerns about the cryptocurrency as an asset class.
Bloomberg News reported Monday that the price of Bitcoin surpassed US$84,000 for the first time amid Trump’s embrace of cryptocurrency and the possibility of pro-crypto lawmakers in the U.S. Congress. Additionally, part of the President-elect’s campaign featured promises to put the U.S. at the center of the crypto industry and for the implementation of a strategic Bitcoin stockpile.
“(Bitcoin’s rally is) simply a follow up on the promises that Trump made during (the) electioneering period and then he got behind the whole cryptocurrency move,” John Zechner, chairman and founder of J. Zechner Associates, said in an interview with BNN Bloomberg.
“And support for crypto, Bitcoin in particular, it’s set up beautifully for this because first of all we know it’s a fixed supply and basically Trump is expected to loosen regulations.”
The biggest thing holding back further crypto enthusiasm has been tighter regulations by the U.S. Securities & Exchange Commission (SEC), he said. Zechner added that amid speculation that Trump may move to get rid of SEC Chair Gary Gensler, markets can open up a little bit more leading to further crypto demand.
While Bitcoin is seeing increased demand in the current environment, Zechner said he describes himself as a “fundamental analyst” and doesn’t agree with the high valuations of Bitcoin.
“The only argument I continue to hear about why you should do buy Bitcoin is because it’s going to go higher, which is sort of the ultimate theory for a bubble asset,” Zechner said.
He added that he also doesn’t see major governments or institutions getting behind Bitcoin or blockchain technology.