Blockchain Association CEO on why Bitcoin ‘has been largely stable’ lately
On Friday (October 21), Kristin Smith, who is the executive director of the Washington, DC-based Blockchain Association (which represents “the recognized leaders of the US blockchain and cryptocurrency industry”), explained in a recent interview why Bitcoin’s price has became so stable in recent months.
Here is her biography:
“Kristin runs the Blockchain Association, where she leads the crypto industry’s development of a strategic roadmap for public policy. She is a seasoned politician, with senior-level experience in both House and Senate offices, as well as experience from the private sector as an advocate for companies in telecommunications, the Internet and other technology-focused industries. Kristin holds an MBA in finance from NYU’s Stern School of Business and a PhD from Georgetown University.“
Smith’s comments were made during a conversation she had with Joe Kernen, co-host of CNBC’s “Squawk Box,” at a time when Bitcoin was trading around the $19,000 level.
According to a report by The Daily Hodl, Smith said:
“I think Bitcoin has been mostly stable for a couple of reasons. One, you have the retail investor who has largely stopped investing in Bitcoin … People are worried about paying for gas. They are worried about paying for groceries. They do not have the ability to put away extra money by investing in Bitcoin at the moment...
“But I think the investors that are in there right now are holding out for a future date. They are in it for the long haul. And I think that as we start to see the economy turn around and people put more risk in their investment portfolios, we’re going to see the investment in Bitcoin go up and then the price.“
On September 16, 2022, Jake Chervinsky, who is one of Smith’s colleagues at the Blockchain Association, responded to Bitcoin maxis, as did Michael Saylor, who is happy that Ethereum’s Merge upgrade may have made $ETH more of a target for the US Securities and Exchange Commission (SEC).
After Ethereum’s Merge upgrade was completed early on September 15, 2022, several influential Bitcoin maxis expressed their reaction to this event.
Saylor, who is a Bitcoin maxi (ie believes that – with the exception of fiat-backed stablecoins like Tether ($USDT) – Bitcoin is the only legitimate cryptocurrency), sent out a tweet in response to comments from SEC Chairman Gary Gensler’s most recent comment on PoS cryptocurrencies that suggested he expects the SEC to eventually declare $ETH a security (as opposed to $BTC which they have publicly called a commodity and therefore not subject to US securities laws).
The Wall Street Journal (WSJ) report that Saylor referenced in his tweet says that “Ethereum’s big software update on Thursday may have made the second-largest cryptocurrency worthless” in the eyes of the SEC. According to the WSJ report, although Gensler did not specifically mention Ethereum, he said yesterday that the native assets of PoS blockchains could pass the Howey test since it was possible to view stakes as an “investment contract” because “the investment public expects profits based on the efforts of others.”
Chervinsky, who was General Council at Compound Labs before becoming Executive Vice President and Head of Policy at the Blockchain Association, took to Twitter on September 16, 2022 to defend Ethereum’s move to PoS consensus by explaining why despite what some may think , the merger has not turned $ETH from a commodity to a security.
He went on to say:
“The general idea seems to be “if you squint hard enough, staking looks like dividends or interest, and some actual securities do, so maybe assets staked are securities too.” That’s not how the law works. It just means that owners of assets that are staked expect profits…
“which alone does not make the assets securities. Expectation of profit is only one of four Howey test points and probably the least important for volatile assets (ie non-stable coins). People have all kinds of assets with an expectation of profit. Gold, cars, watches etc.
“In other words, the expectation of profit is a feature of all investable commodities, not just securities. Whether the profit comes in the form of an increase in the market price, a stake reward or any other mechanism should make no difference to the securities analysis.“
A short time later, he went even further, suggesting that rather than the merger being a mistake, it is a win for Ethereum since it reduces the chance that the SEC will classify $ETH as a security:
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