DUBAI: Bitcoin, the cryptocurrency that has recently been the subject of wild market gyrations, is “the people’s declaration of monetary independence,” the World Government Summit heard in Dubai.
Nick Spanos, founder of the Bitcoin Center in New York, was speaking at a packed session entitled “Is the future of cryptocurrencies gold or dust?”. He defended the record of the currency and said its current decline would never render it worthless.
“It will not crash to zero because it’s scarce. It is not a bubble. It’s the pin that’s going to pop the legacy currency bubble that’s been holding the people back,” he added.
The cryptocurrency has recovered some lost ground recently, trading around $8,500 yesterday compared with a price of below $6,500 earlier this month, but still way off the highs seen last year, just short of $20,000.
Bitcoin has been slammed as a “fraud” and a “Ponzi scheme” by some orthodox investors.
That volatility has prompted calls for regulation of the cryptocurrency industry, which is currently traded off central exchanges and is regulated only lightly in many countries. Spanos said: “If you try to regulate it, you will only regulate your country out of it.”
Other members of the panel took a more measured approach. Lawrence Wintermeyer, principal of the Elipses firm and “social capitalist,” said there was a need to get banks and exchanges involved in “know your customer” (KYC) and anti-money laundering procedures regarding bitcoin and other digital currencies.
Kian Lon Wong, president of the NEM Foundation, which promotes the use of blockchain technology in business, said: “It is in the trading of cryptocurrency that the problem is, for example in money-laundering. But it is still a lot less than in the conventional currencies.The regulators are on a learning curve, especially over how to regulate trade in exchanges.
“The minimal requirement should be security. We need the exchanges and the regulators to come together on this,” he added.
Jesse Powell, chief executive of the Kraken Bitcoin Exchange, said that it was difficult for regulators to control it because it was a globally traded product. “It trades not just in your jurisdiction but anywhere in the world.
“The regulators should take care not to make it too difficult because the next stage after a central exchange is a decentralized exchange, and they’re much more difficult to control.” he added.
He also warned that Bitcoin consumers “should look out for themselves. I still say buyer beware.”
Wong denied that there was an element of price manipulation in last year’s big rises. “We’re in a growing place and these things are unavoidable. I have no concern about manipulation. Blockchain is a proven technology and it’s here to stay,” he said.
Spanos explained last year’s dramatic rises in Bitcoin as down to “peer interest and trust.” He said cryptocurrencies would have a $1 trillion market capitalization this year, compared with the top level of $600 billion in 2017.