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By: Todd Aydelotte
If you’ve followed the rollercoaster headlines, bitcoin’s price has climbed for much of the past year. Right now, just one bitcoin will cost you more than $ 23,000 – representing a staggering ascendency for the cryptocurrency invented by “Satoshi Nakamoto” in 2008.
And while the price of bitcoin may rise and fall in the months ahead, it’s undeniable cryptocurrencies have entered a new phase of adoption. Gone are the days when bitcoin was traded by a quirky network of tech enthusiasts. The new players in crypto are increasingly institutional, hailing from the world of traditional finance. Case in point, Mass Mutual’s $100 million investment in bitcoin on Dec. 10, or JP Morgan’s launch of the much-ballyhooed JPM Coin in 2019.
As Wall Street embraces more digital currencies, blockchain and crypto business leaders look hopefully to the Biden administration, which can free the industry from years of regulatory uncertainty and further fuel American innovation. In July 2019, a tweet from President Donald Trump perfectly captured his administration’s attitude about cryptocurrencies: “I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air.”
Others beg to differ.
“I think what we see with a Biden administration is an opportunity to get some fresh faces into the key regulatory agencies that might be more willing than some of the other regulators that we have today to move forward on policies that would be good for crypto,” said Kristin Smith, executive director of the Blockchain Association, in a recent interview with Fortune.
In the opening weeks of the presidential transition, the Biden administration set a promising tone when it selected ex-Goldman Sachs banker Gary Gensler to lead the transition team for financial policy and Janet Yellin as treasury secretary. Both figures have deep roots in traditional finance, yet each have made remarks suggesting they will be much warmer to cryptocurrencies and digital assets than the prior administration.
In many ways, the race toward a future of digital money is a lot like the race toward 5G. In both instances, the U.S. and Western Europe must contend with Asian counterparts that got there early and are willing to make some enormous bets. For example, the Chinese government has committed to blockchain technology as part of its Five-Year Plan and is currently testing a Digital Yuan, a digital currency (not crypto) issued and backed by the country’s central bank. China joins a number of G20 countries with similar initiatives.
As America shakes off the COVID-19 downturn and looks toward the fertile fields of cryptocurrencies and digital money, I recall the famous words typed in 2010 by Satoshi Nakamoto, the fabled anonymous creator of bitcoin: “If you don’t believe it or don’t get it, I don’t have the time to try to convince you, sorry.”
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Todd is a managing director in the New York office of Allison+Partners who specializes in technology and healthcare communications.