Crypto preview: Winklevoss based Gemini on Bitcoin, fixed coins, regulation

  • Crypto journey is just beginning, says exchange platform Gemini – founded by the Winklevoss twins.
  • Here Gemini explains the future of Bitcoin, and the best use of so-called ‘fixed coins’.
  • Crypto regulation should not be feared, Gemini UK head Blair Halliday told Insider.
  • Visit the Business Insider homepage for more stories.

Love it or hate it, Bitcoin is having a moment.

In the last 12 months alone, it has gone from a ridiculous speculation trade, to breaking the $ 41 level in January – with some investors even floating it as the new Gold.

Bitcoin’s story has not been without its gay people. In 2017, Jamie Dimon, JP Morgan’s chief executive office, called the cryptocurrency a “bit of a fraud,” adding that it was “worse than tulip bulbs.” Since then, much has changed with JP Morgan now leading Wall Street arguing that there is a case for Bitcoin hitting $ 146,000.

And yet, after a tough run this year, investors are growing tired, with increasing numbers believing it is forming a bubble that will burst. This week, Deutsche Bank published research that showed that market players rate Bitcoin at 8.7 out of 10 on a bubble scale, with 10 being an ‘extreme bubble’.

However, for Gemini, a crypto exchange platform founded by Tyler and Cameron Winklevoss, this is just the beginning.

“From our perspective, we see value in the grip, when using crypto as part of your portfolio. If you’re going to have a portfolio for investment, not having a diversification into crypto is a trick and miss him big time, “said Blair Halliday, UK managing director of Gemini.

The Winklevoss twins have famously said they see a case for Bitcoin hitting $ 500,000, on the grounds that it is about to become a classic inflation hedge, taking the mantle of gold.

With its stable supply, portability and flexibility, “Bitcoin prefers gold over gold – and not just incremental, but in order of magnitude or 10X better,” the Winklevoss twins wrote in a post blog 2020.

Above-ground gold is priced – conservatively – at around $ 9 trillion, which means if the twins are right about “using a gold framework to price Bitcoin, and Bitcoin continuing on this path, then scenario the case of a Bitcoin bull is that it is undervalued by a multiple of 45, “they wrote.

This journey will not be without its interchangeability, says Halliday, a frequent taboo word in the world of crypto. “I recognize that people are concerned about these things, but a long-term vision … to ride out in the fall, recognize that it will happen like any asset class,” he added.

For Gemini, Bitcoin no longer carries the “Wild West” trope it did in 2018 and 2019, after record-breaking prices collapsed and a string of scandals involving various swaps and high-profile fraud and image manipulation cases digital tickets. Halliday said he would opt for a “HODL” strategy, using the crypto slang meaning to hold onto Bitcoin rather than sell.

“Of course, we understand that with the trajectory up, there are naturally people who bail out and who will have some variation, but our view is definitely the value in crypto in the catch” “and from a long-term perspective” he added, saying the data and traction support Gemini’s view.

Bitcoin is likely to start appearing in many portfolios as people become more confident in this type of asset, Halliday said based on the interest he’s seen from institutional investors.

“Look, JPMorgan changed their tune, why wouldn’t organizations do the same?” he asked.

What are fixed coins and how should you use them?

Crypto is broader than just Bitcoin, with people like Ethereum – who soared past $ 1,430 to set a new all-time high earlier Wednesday, outperforming Bitcoin’s achievement of 26% to date. Even marginal cryptos like Dogecoin performed well last year, after Elon Musk tweeted about the feme-inspired coin.

But, one of the most interesting phenomena has been the growth in fixed coins, a group of cryptocurrencies that are pegged to a reserve asset, such as the US dollar or gold. For example, Tether is a fiat-collateral coin backed by the US dollar.

Fixed coins have gained traction, offering exposure to crypto holders and trying to achieve greater price stability.

Gemini is certainly not an agnostic on fixed coins, Halliday noted, pointing to the Gemini dollar – a fixed coin available on the US platform.

But the the real benefit of a fixed coin is as a transfer point, Halliday said, adding that they themselves will not generally be valued.

“I wouldn’t necessarily say holding a fixed coin in the long run is what we personally do. I think what it does is allow you to hold digital currency for fast access, either in or out, for specific crypto coins that you may want to buy, ”he explained.

Fixed coins more naturally identified the role as a way to exchange or pay in some format, he noted, its value is just as good. “on and off the ramp o crypto-currency you want to buy or sell. “

Regulation should not be feared

One of the biggest threats to the crypto story has been regulation, which some argue would undermine the freedom of these digital coins, one of the central reasons for owning them, according to their supporters.

Most recently, the U.S. Financial Crime Enforcement Network (FinCEN) proposed a new law that would require companies to collect people’s names and addresses if they make cryptocurrency transactions over $ 3,000, helping law enforcement track any transactions illegals being conducted.

In an open letter, Jack Dorsey, CEO of Twitter and crypto-platform Square, called the proposal ‘nonsensical’.

“The mismatch between cash and cryptocurrency handling under the FinCEN proposal will prevent the adoption of cryptocurrency and invade individuals’ privacy,” Dorsey wrote.

Gemini also wrote an open letter expressing concern about the substance of FinCEN’s proposed rule on unsupported wallets and the process through which it is introduced.

“Our stance is definitely that we considered the review period for the offensive legislation to be far too short, and skewed on the rush side … it was disproportionately short,” Halliday said.

But, regulation is inevitable and should not be feared.

“I don’t necessarily think regulatory oversight is a problem. I think everyone can take comfort and control from regulators involved,” Halliday said.

As one of the few authorized e-money institutions authorized by the UK Financial Conduct Authority (FCA), and having sought regulatory approval in all jurisdictions in which Gemini operates, the company is comfortable working regulators, he said Halliday.

“I think seeing them as evil is going to bring issues further down the line,” he added.

However, there is an important difference to make: there should be regulation, not prohibition.

In October 2020, the FCA banned the sale and trading of crypto derivatives for retail consumers, arguing that they caused harm and were not always properly valued by the consumer.

But, this flies in the face of the approach taken by other jurisdictions, Halliday said, highlighting proposed changes to existing European Union regulations.

The EU approach will provide oversight, ensuring that companies offering services have the right regulatory controls, which are more appropriate than banning them, Halliday said.

“It is important that consumers are protected, but consumers need to be aware of what they are getting into, but also allow them to make the investment choices that are right for them,” he explained, adding that new laws should not stifle development. in space.

Gemini is excited about the UK market, but the financial securities regulator will need to create a viable market for the crypto space, he noted.

“We definitely don’t want situations where we’re kind of behind the ball of eight, it seems, compared to some of our jurisdictional competitors,” he said.