On Tuesday, the majority of the leading cryptocurrencies traded at low prices as the market valuation of all cryptocurrencies fell below $900 billion, down by almost 5 percent in the day. On Wednesday, Bitcoin temporarily dipped below the $20,000 level as the market was still being affected by a number of factors, such as macroeconomic concerns and problems with cryptocurrency firms.
Is the Cryptocurrency Crash “Justified”?
According to a Business Insider story, Lee Reiners, a former employee of the Federal Reserve Bank of New York, thinks that authorities ought to outlaw cryptocurrencies.
The current cryptocurrency fall, in Reiners’ opinion, is justified since Bitcoin, the biggest cryptocurrency in the world, failed to perform as “digital gold” in the context of significant inflation. Reiners is currently a professor at Duke Law School.
By asserting that the largest cryptocurrency bull run to date was fully caused by the central bank’s ultra-loose monetary policy, which allowed for excessive speculation, the fintech expert has channeled many other observers. Bitcoin and other risky assets are performing poorly now that the Fed has started raising rates quickly to control inflation.
According to the former Fed supervisor, cryptocurrency is worthless in and of itself because it has no cash flow and no fundamentals. Reiners also threw cold water on the blockchain technology, pointing out that it lacks any “killer use cases” despite Bitcoin, its primary use, having existed since 2009.
The fintech professor said that the word is simply a euphemism for “favorable” legislation in response to those bitcoin sector participants who persistently call for regulatory clarification.
Reiners has criticized the Lummis-Gillibrand cryptocurrency plan, which seeks to defange the powerful Securities and Exchange Commission while making the Commodity Futures Trading Commission (CFTC) the primary regulator of cryptocurrencies (SEC). The Duke professor claims that the CFTC has given the cryptocurrency business everything it wants by taking a light-handed approach to regulation.