Although traders are ready for a “terrifying” price collapse, bitcoin has surged back this year, driving up the price of XRP, Ethereum, and the broader crypto market. After hitting $70,000 per bitcoin in early June, the price of bitcoin has since fallen below $60,000, with a billionaire bitcoin buyer just disclosing a significant turnaround.
A U.S. Securities and Exchange Commission (SEC) leak has now raised anticipation that Wall Street may be ready to enter the bitcoin and cryptocurrency market more deeply, just as a bold policy plan puts bitcoin on a $16 trillion collision course with gold.
According to an unidentified source, several businesses and financial institutions have agreements with the SEC that would enable them to avoid the contentious crypto accounting guidelines, which essentially forbid banks from holding cryptocurrency on behalf of customers.
Banks and other businesses that hold cryptocurrency must report their customers’ holdings as liabilities on their balance sheets in accordance with the SEC’s staff accounting bulletin 121, or SAB 121. This process can be difficult and expensive.
According to an anonymous source, the Wall Street firms have demonstrated to the SEC that they have the systems and processes in place to enable clients to reclaim their cryptocurrency in the same way that they would any other asset in the event of bankruptcy.
The House of Representatives, which is controlled by the Democratic Party, voted this week to support President Joe Biden’s veto of SAB 121. Patrick McHenry, R-N.C., the chair of the House financial services committee, stated in remarks that “SAB 121 is one of the most glaring examples of the regulatory overreach that has defined chair Gary Gensler’s tenure at the [SEC].”
It disrupts decades-old bank custody standards and raises the risk of concentration by limiting consumer options for securely storing their digital assets. Within the cryptocurrency community, there was optimism that the Democratic Party would soften its stance against cryptocurrencies in light of the growing Republican acceptance of bitcoin and other digital currencies.
The first legislation ever passed by the House and Senate pertaining to digital assets was vetoed by President Biden, according to McHenry. This administration’s preference for power-hungry bureaucrats over the interests of the American people is more evident than ever.
After the U.S. Senate joined the House of Representatives in trying to repeal the SEC crypto policy before President Biden vetoed it in May, Michael Saylor, the executive chair of software business MicroStrategy, which had turned into a bitcoin buyer, urged legislators to abandon SAB 121. The Senate is now interested in bitcoin, in addition to Wall Street and the House of Representatives, Saylor posted on X.
