By
Steve Muchoki
April 23rd, 2024
Secretary of the Commonwealth of Massachusetts ‘William Galvin’ is the latest to join the club of Bitcoin critics with his straight-forward views.
It might sound a bit weird, but Bitcoin’s growing popularity has also turned a major reason for its criticism. As the value of Bitcoin continues to grow further, a few financial analysts and professionals have been getting more vocal and sharp in their criticism with many calling it to be just a bubble.
Joining the league of Bitcoin critics recently is Massachusetts’ top securities regulator – William Galvin. Galvin recently appeared on a CNBC show and said that Bitcoin “doesn’t pass the smell test.” He further said that his office is qualified enough to make a statement or issue a warning on Bitcoin because it believes that the digital currency is “entirely speculation”.
Galvin said: “There is no product here. This is entirely speculation. That’s already been proven by the high gyrations of the value. It’s also subject to manipulation because no one can explain it no one can control it.”
In the past 12 months, Bitcoin has scaled to meteoric new highs giving over 1500% returns year-to-date. Bitcoin ended the year of 2016 at $970 and in one year it has managed to scale as high as $20000. Currently, at the press time, Bitcoin is trading at $14807.90 with an overall market cap over $248 billion, according to CoinMarketCap.
Moreover, Bitcoin’s growth in the last one year has not been acknowledged by just retail investors but also by several financial institutions who have openly extended their support to the cryptocurrency by launching different Bitcoin-related investment products.
However, with the cryptocurrency market valuations surging to new highs in just the past two months, regulators and government bodies have been constantly issuing signals of caution to the investors and have been asking them to reduce their exposure to the crypto markets. Federal regulators have also stepped up their warnings on cryptocurrency related investments this month. Commenting on the warning issued, Galvin said we “don’t always agree, but we all seem to agree that this is a problem.”
While talking about the method of raising funds through Initial Coin Offerings (ICOs), Galvin said: “We believe they (ICO) certainly qualify as securities.”. He further added that “This is clearly an area with potentials for fraud. And we are very concerned about that.”
As there has been a lot of craze and frenzy around Bitcoin investments, Financial Industry Regulatory Authority issued an investor alert which states that “Don’t be fooled by unrealistic predictions of returns and claims made through press releases, spam email, telemarketing calls or posted online or in social media threads. These actions may be signs of a classic ‘pump and dump’ fraud.”
Off lately, it has also been observed that investors are getting swayed to invest in stocks of very tiny companies associated with the crypto technology i.e. the blockchain technology. The stocks of some companies have surged by several hundred percents without any growth in the operations of the company and this is a worrying sign.
However, it has to be noted that many of bitcoin critics are still in support of the blockchain technology which backs the cryptocurrency. Many see blockchain as a revolutionary technology as it eliminates the need for third-party intermediaries thereby allowing for a quick permanent record of transactions between two parties. This makes blockchain technology very useful for several different industry applications as well.