Is Selling Bitcoin, Other Cryptos On SEC Concerns Justified? Veteran Trader Peter Brandt Says Any Weakness Is Temporary

Veteran trader and CEO of Factor LLC Peter Brandt, in response to a series of tweets from investment strategist Raoul Pal, acknowledged that the hardline the U.S. regulators were taking on cryptocurrencies could “weigh on prices near term.”

What Happened: Brandt was responding to a series of tweets from Pal on Tuesday in which he laid down his thoughts on the U.S. Securities and Exchange Commission’s move on cryptocurrencies such as Bitcoin BTC/USD, Ethereum ETH/USD, Dogecoin DOGE/USD and others.
See Also: ​​How To Buy Dogecoin (DOGE)

Pal said it is clear to him that SEC Chair Gary Gensler is “laying down the hardest case he can for regulation of digital assets.”

“My view is that in the end, we will get new securities laws for digit assets and that they will be cheaper, faster, fairer and much less onerous on issuers,” Pal wrote in a tweet-thread.

The investment strategist noted that the process is likely to take years but the next 3 to 5 years in crypto will be about “setting the battle lines and then using the courts and lobbyists to reach a grand settlement of what it means to classify something as a security.”

While Brandt agreed with Pal on his analysis and the final outcome, he expressed an opinion that the battle would impact the prices near term. 

Thanks for the very insightful and thoughtful analysis Raoul. You are right that the SEC will take a hard line initially on cryptocurrencies, declaring them as securities. You are also probably right on the eventual outcome, but the battle could weigh on prices near term.

— Peter Brandt (@PeterLBrandt) September 22, 2021

Why It Matters: On Tuesday it was reported that Gensler compared cryptocurrencies with the Wild West and said “we can do better.”

See Also: ANALYSIS: Is Federal Regulation Of Cryptocurrency Coming Anytime Soon, If At All?

Over the weekend, Coinbase Global Inc COIN said it would not launch its cryptocurrency lending product saying it continues to seek regulatory clarity.

Earlier in the month, Coinbase CEO Brian Armstrong had decried SEC’s “sketchy” behavior after the agency threatened to sue the company over the cryptocurrency lending product.

Gensler had previously indicated in his testimony to the U.S. Senate that he would be targeting stablecoins and that majority of the tokens listed on major cryptocurrency exchanges were in fact securities and should be treated as such.

Last month, the U.S. regulatory agency sued an organization responsible for the development of a decentralized finance or DeFi protocol over its activities which allegedly involved the sale of unregistered securities.

Price Action: At press time, BTC traded 1.65% lower at $41,943.78.

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