Investors see a future with cryptocurrencies, but US regulatory “inaction” is costing support from elected officials, according to Michael Sonnenshein, CEO of Grayscale Investments. The digital asset firm is suing the Securities and Exchange Commission (SEC) after the regulator refused to authorize the conversion of its $12 billion worth of Bitcoin
“Regulators’ inaction to take an existing product and bring it closer to the regulator’s eye is a missed opportunity,” Sonnenshein said, speaking at the premiere. Forbes Iconoclastic Summit Thursday.
Grayscale received Support from the crypto and traditional finance quarters in its legal battle against the SEC.
The largely anti-establishment crypto industry was looking away from regulators, but in order to encourage new investors to take the digital plunge, it sought clearer government standards. Meanwhile, President Joe Biden’s White House could be encouraging the SEC and other agencies to use existing law to regulate the industry in a non-adversarial manner.
“Now regulation is a must.” says Christine Moy, Head of Digital Assets at Apollo Global.
However, investors are looking beyond legislative proposals currently stalled in Congress and toward the upcoming midterm and 2024 presidential elections. “It’s on the minds of voters,” Sonnenshein says of Grayscale’s lawsuit against the SEC.
“The presidential candidates in 2024 will both be pro-crypto,” adds Anthony Scaramucci, founder of SkyBridge Capital. “There are over 70 million people who own crypto, and they won’t want to piss them off.”
Sam Bankman FriedCEO of FTX exchange (and owner of 30% of Scaramucci’s SkyBridge), is making a tangible push to fund crypto-sensitive candidates through 2024, but maybe not up to the $1 billion he had summer cited as a promise in August. “We play it by ear,” he said on a previous signspecifying that the total amount he would give to political campaigns could very well be less than 1 billion dollars but not more.
Young voters are likely to have the biggest impact on the election of crypto-friendly candidates. A recent poll by Grayscale showed that 80% of voters going to the primaries want more crypto regulations and 50% say crypto is the future of finance.
For Moy, it is this age demographic, those between the ages of 19 and 25, who are more likely to have their first investment in bitcoin, ethereum or even dogecoin.
“Think about the psychology of this generation,” she told attendees. “When they inherit the generational wealth, how will they invest?”
Sonnenshein agrees, saying that “given these investor inclinations and preferences, some of it is going to end up in asset classes like crypto.”