Tighter government crypto regulations would actually be a positive catalyst for bitcoin, MicroStrategy co-founder and CEO Michael Saylor told CNBC on Wednesday.
“Additional regulatory clarity from the [Biden] administration is going to benefit bitcoin and accelerate institutional adoption of that asset,” Saylor said on “Squawk on the Street,” stressing as a major bitcoin believer and holder he’s looking for “clear, bright line definitions of digital property versus a digital security versus a digital currency and the operating rules of the digital exchange.”
U.S. Securities and Exchange Commission Chairman Gary Gensler said last month that the agency is planning to crack down on Wall Street, including by creating and enacting rules for cryptocurrency markets. Back in August, Gensler said Congress needs to grant the SEC additional powers to regulate crypto.
Saylor, a prominent advocate for bitcoin whose company has invested heavily in the digital currency, attributed crypto market volatility to high speed trading, saying he believes that inevitable widespread adoption will help stabilize the market.
“The most important point is that Big Tech and Big Finance and billions of people around the world need a digital property solution,” Saylor said. “We have a technically sound, economically sound, morally sound, politically sound path forward, and that’s bitcoin. I think people are starting to realize that now.”
Catalysts for widespread adoption of crypto, according to Saylor, include the approval of spot bitcoin ETF proposals and regulatory approval to use fair value accounting for bitcoin holdings.
The SEC recently objected to an accounting method MicroStrategy used in its quarterly financial reports. The enterprise software firm had been issuing a non-GAAP operating income figure that excluded impairment losses related to its bitcoin holdings, analysts at BTIG explained in a recent note.
As of Jan. 31, MicroStrategy owned 125,051 bitcoins, CFO Phong Le said on the company’s earnings call Tuesday. At current prices around $37,400 per coin, that stake was worth nearly $4.7 billion. Le said the firm’s average purchase price was $30,200 per unit, including fees and expenses.
Saylor was less bombastic in Wednesday’s interview, compared to past CNBC appearances. Just about a year ago, he predicted on “Squawk Box” that bitcoin’s market value would reach $100 trillion one day.
Bitcoin, which is the world’s largest digital currency, had a total market value around $709 billion on Wednesday, according to CoinMarketCap, with the entire crypto market only worth $1.7 trillion.
The price of bitcoin, known for its volatility, has fallen on hard times recently, trading nearly 50% below its all-time high near $69,000 per unit in November.
— CNBC’s Kevin Stankiewicz contributed to this report.