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Renowned investors Michael Novogratz and Anthony Scaramucci have offered striking assessments on the regulatory frameworks and current state of the cryptocurrency market that will shape its future.
Speaking after his meetings in Washington, Novogratz said he was “optimistic” about the passage of the cryptocurrency market structure bill, but noted that a major power struggle was taking place behind the scenes.
Based on his observations in Washington, Novogratz stated that there is a strong will on both the Democratic and Republican sides to pass the law. He specifically mentioned that the Democrats want to remove this issue from the table before the elections to avoid appearing “anti-crypto.” According to Novogratz, the fate of the law will become clear within the next month.
One of the most striking aspects of the news was the pressure exerted by the traditional banking lobby on the crypto sector. Novogratz stated that banks are trying to sway stablecoin regulations in their favor by using significant lobbying power.
He stated that banks fear a shift of deposits towards stablecoins and are therefore pushing to prevent stablecoin companies from paying interest/yield on balances.
Novogratz stated that the sector might lose this battle for now, adding that “perfection shouldn’t be the enemy of good” and that it’s more important for the law to pass with some compromises to pave the way for the sector.
Novogratz argued that traditional banks (JP Morgan, Wells Fargo, etc.) pay almost no interest on savings accounts, whereas stablecoin and DeFi (Decentralized Finance) solutions offer a much more transparent and profitable alternative for consumers.
Touching upon the technical outlook for cryptocurrencies, Novogratz stated that Bitcoin is currently in a consolidation period. He cautioned investors against getting carried away with bullish enthusiasm unless Bitcoin breaks above the $100,000-$104,000 range and remains permanently above that level.
*This is not investment advice.