Cryptocurrencies and reliability don’t exactly go hand in hand, but the events of recent days certainly raised their trustworthiness level. Coinbase, the first major crypto company going public, is the talk of the town. Some people became extremely wealthy overnight. Some once invested $300,000, and on April 14th, found themselves with a lump sum of $680 million. But could regulations spoil the collective joy of crypto believers?
The historic day for crypto: Coinbase goes public
In case you missed it, the cryptocurrency exchange platform made history with its stock market entry. The Twittersphere went crazy, with investors patting themselves on the back if they took a bet on Coinbase. Shortly after opening, it reached $429.54 at Nasdaq. Even the closing price at $328.28 was far more than the initial listing reference price of $250. The victorious day has ended at an astonishing $112 billion valuation.
The Coinbase founder, Brian Armstrong, immediately became one of the world’s richest people. But among all the celebrations, he recognizes that the regulation threats to the everlasting glory of crypto are very, very real.
The regulation question marks
“Basically, we just ask that, hey, we want to be treated on those level playing field with traditional financial services at the very least and not have any kind of punishment for being in the crypto space,” Brian Armstrong said for CNBC. As he explained, the regulation threats are as serious for the industry as cybersecurity. The market does indeed echo his worries.
Bitcoin, for example, reached a record (almost) $65k when Coinbase made its stock market debut. However, soon enough, the price went down again. Regulation rumors connected to fears of illicit crypto use, as well as other threats, certainly didn’t help. Neither did Turkey’s decision to ban cryptocurrency payments from April 30th onwards. It could be a ticking bomb – any government could potentially enforce strict taxation, for example. “Especially now that Coinbase is a public company, we’re gonna increasingly be having scrutiny about what we’re doing, and people want to understand the implications of it,” Armstrong admitted, adding that Coinbase is more than happy to play by the rules.
Biden’s crypto regulation plans
In 2020, the Trump administration announced pretty terrifying regulation plans that could have derailed the wild dreams of crypto fans. The former President was even willing to set aside $127 million “to combat emerging virtual currency and cybercrime threats.” Biden’s Treasury Secretary Janet Yellen, however, seems less eager to crush crypto. “I think we need to look closely at how to encourage their use for legitimate activities while curtailing their use for malign and illegal activities,” she wrote to the Senate Finance Committee.
And so, while some countries may shake cryptocurrencies with their bans, the US likely won’t follow suit. As Fox Business’s Charlie Gasparino investigated, the Biden administration is already hard at work and in the early stages of developing regulations. His report included some good news: considering how many American investors are involved, crypto is likely here to stay. However, new laws are almost inevitable, especially concerning infrastructure and taxes.
They say that what comes up must come down. With crypto, that’s true every once in a while. But now that Coinbase has solidified its presence and regulators are on high alert, the future might get even more gripping.