Crypto Regulatory Uncertainty Is “Intentional” – Michael Saylor
In a recent interview, MicroStrategy founder Michael Saylor aired his view on the current issues affecting the crypto space. The Bitcoin advocate notes that the lack of regulatory clarity in the digital asset ecosystem is an intentional move to prevent crypto from becoming more mainstream.
The Regulatory Issue
During the recently concluded Bitcoin 2023 conference in Miami, Michael Saylor stated that cryptocurrency’s lack of regulatory clarity is intentional. Citing data from CoinGecko, Saylor revealed that the number of public companies incorporating Bitcoin as a treasury reserve asset remains relatively low, with just 24 listed firms.
However, the Bitcoin maximalist stressed that the low adoption rate is due to several factors. The accounting treatment of the token is categorized as an indefinite and intangible asset.
Saylor further explained that this accounting treatment is a deterrent to potential investors, as it doesn’t reflect Bitcoin’s value accurately. Furthermore, the entrepreneur emphasized that the complex nature of the crypto market, coupled with the emergence of various alternative digital currencies and recent regulatory actions, has instilled a sense of caution among conservative CFOs.
Nonetheless, Saylor believes that Bitcoin’s credibility has been boosted by the shortcomings observed in other cryptocurrency enterprises, underscoring its distinctiveness as a commodity. As regulatory challenges are resolved, and accounting practices surrounding Bitcoin become more standardized, Saylor suggests that more businesses may eventually consider including Bitcoin in their asset allocations.
While speaking about the absence of comprehensive regulatory clarity within the crypto space, the Bitcoin advocate noted that it is a deliberate act from the authorities rather than an unintended oversight.
Is MicroStrategy (MSTR) Shares Better than Coinbase’s (COIN)?
In a recently published report, German investment bank Berenberg highlighted MicroStrategy (MSTR) stocks as a better alternative to Coinbase (COIN) for investors seeking to enter the cryptocurrency sector. The report further stated that investors with a pessimistic outlook on Coinbase shares and inclined to short the stock should consider pairing it with a long position in MicroStrategy.
Notably, the report highlights a substantial correlation of 0.96 between the two stocks since Coinbase’s direct listing began in April 2021. According to the note, the US SEC’s classification of most crypto tokens as unregistered securities exposes these digital assets and the platforms facilitating their trading to potential regulatory measures.
Moreover, the note added that the US regulator and its counterparts from other jurisdictions have been transparent in categorizing Bitcoin as a commodity rather than a security. Analysts Mark Palmer and Hassan Saleem believe that MicroStrategy presents an appealing alternative to Coinbase.
With its distinct business model centered around acquiring and retaining Bitcoins, MicroStrategy stands out as an attractive option. According to Berenberg, the upbeat macro drivers that fuel demand for Bitcoin are also expected to have a bullish impact on MicroStrategy shares.
Moreover, investors’ fears regarding de-dollarization, which refers to the potential decline in the US dollar’s dominance, have cast a more favorable light on Bitcoin in recent months. The analysts noted that recent statements made by SEC Commissioner Gary Gensler regarding Coinbase indicate his perception of the company’s failure to adhere to securities laws.
Meanwhile, the analysts highlighted Gensler’s concerns regarding the company’s defiant attitude toward regulatory scrutiny. They suggest that such behavior may hasten the initiation of any potential enforcement action.
According to the report, if enforcement action were taken against Coinbase, the impact on the company’s revenues would be significantly greater than its overall revenue. The report further stated that Berenberg maintains a hold rating on Coinbase shares, setting a price target of $55, while MicroStrategy is given a buy rating with a price target of $340
Meanwhile, current data shows that MicroStrategy has a substantial holding of approximately 140,000 BTC, roughly $3.8 billion, based on prevailing market prices.
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