If this one thing happens, Bitcoin could double in price

The future of crypto may be decided by the Senate Agriculture Committee. No, it’s not a typo. That’s because the Commodity Futures Trading Commission (CFTC) is trying hard to become the primary regulator of the crypto industry, and the CFTC falls under the Senate Agriculture Committee. An expanded role for the CFTC is generally perceived as good news by the crypto industry, which sees the CFTC as a much more crypto-friendly regulator than the SEC.

What is notable is that the regulatory turf war between the CFTC and the SEC is being fought publicly these days. SEC Chief Gary Gensler has publicly called for his agency to regulate the crypto industry, and now the CFTC is fighting back. The head of the CFTC, Rostin Behnam, just threw the crypto industry a bone by suggesting in a chat at the NYU School of Law that Bitcoin (BTC 3.78%) can double in price if his agency gets to set the rules. A doubling would send Bitcoin on a trajectory from its current price of around $20,000 to nearly $40,000.

Is crypto a value or a commodity?

Whether the CFTC or SEC is allowed to regulate crypto comes down to a simple question: Is crypto a security or is it a commodity? If it is a security, the SEC must regulate it. If it’s a commodity, the CFTC gets to regulate it. According to current guidelines, crypto is only a security if there exists an investment contract where people pool their money in a joint venture to make money.

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As for Bitcoin, there is almost 100% consensus that it is a commodity. In fact, some have argued that Bitcoin may be the only crypto that can avoid regulation under federal securities laws. The SEC’s Gensler has gone so far as to suggest that Ethereumthe second largest crypto by market capitalization should now be classified as a security.

So wait, you’re probably thinking, what on earth does the Senate Agriculture Committee know about crypto that the SEC doesn’t? Well, the Senate Agriculture Committee knows a lot about commodity trading of wheat, corn and pork. According to the Senate Agriculture Committee, crypto should be considered “digital goods” that are traded on exchanges.

And the committee also knows a lot about metals such as gold and silver, both of which are also traded on major stock exchanges. And the CFTC gets to regulate this. So if Bitcoin really is “digital gold” — shouldn’t it also be regulated in the same way as physical gold?

The Bitcoin Price Prediction

To be clear, it’s a little strange for the head of the CFTC to post a price target for Bitcoin. Maybe this wasn’t the intention, but it’s almost as if he’s using some sort of political dog whistle to suggest, “Hey, if you have crypto lobbying in Washington, I’d suggest lobbying the CFTC if you want to see the price of Bitcoin go up.” That may explain why all the bipartisan legislation coming out of Washington these days has an outsized role for the CFTC, and why the crypto industry seems to be rallying behind the CFTC as the regulator of choice.

According to CFTC chief Behnam, Bitcoin can double in price because financial markets thrive on security. The establishment of a level playing field for an industry helps to attract more participants. As a result, the introduction of regulatory security for crypto is likely to attract institutional money flows from Wall Street. Many of the biggest names in the financial industry are simply waiting for a signal from Washington that investing in crypto is OK.

Given the growing interest of institutional investors in crypto this year, it is not out of the question that Bitcoin could double in price. When Black stone announced a collaboration with Coin base to enable crypto trading for institutional clients, for example, some predicted that Bitcoin would skyrocket to $250,000. That was based on the assumption that large pension funds and endowments would start allocating a small portion of their portfolios to crypto. So a doubling in price to $40,000 might seem outrageous at first glance, but it’s certainly not out of the question.

A vote on the CFTC is a vote on Bitcoin

It’s hard to predict the various plot twists that can take place in Washington, DC, these days, especially with the 2022 midterm elections approaching. But given the fact that the Senate Agriculture Committee is now spearheading legislation to make the CFTC the primary regulator of crypto, as well as the fact that the CFTC is publicly saying it can increase the price of Bitcoin, it should be clear who cryptos. should mess up. If the CFTC is allowed to regulate crypto, Bitcoin could double in price.