Gensler Chairman "2 Trillion Dollar Market, Must Increase Investor Confidence"... Coinbase Stock Plummets 8%
[Asia Economy New York=Correspondents Baek Jong-min and Park Byung-hee] As investment funds pour into cryptocurrencies, the U.S. Securities and Exchange Commission (SEC) has voiced the need for regulations on cryptocurrency exchanges.
Gary Gensler, SEC Chairman, appeared before the House Financial Services Committee hearing on the 6th (local time) and stated, "The $2 trillion cryptocurrency market can achieve greater benefits through investor protection," urging lawmakers to develop measures for the SEC to directly regulate cryptocurrency exchanges.
Chairman Gensler expressed concern that "because there is no regulatory body overseeing cryptocurrency exchanges, investor protection against fraud and manipulation is lacking," emphasizing that only Congress can enact such regulations. He predicted that if cryptocurrency exchanges were regulated by the SEC or the Commodity Futures Trading Commission (CFTC), investor confidence would increase.
Gensler is a cryptocurrency expert who previously taught fintech at the Massachusetts Institute of Technology (MIT) Sloan School of Management. The cryptocurrency industry had expected that after his appointment, Gensler would implement crypto-friendly policies. However, his remarks on this day contradicted those expectations. Earlier, the SEC had postponed the review of approval for a Bitcoin investment exchange-traded fund (ETF) until June. Following Gensler’s comments, the stock price of Coinbase, the largest cryptocurrency exchange in the U.S., plunged 8% intraday.
Meanwhile, global investment funds, which had been concentrated in stocks, are rapidly flowing into the cryptocurrency market. According to cryptocurrency market data provider CryptoData, last month’s global cryptocurrency market trading volume was $1.7 trillion (?1907 trillion), up about 30% from $1.2 trillion in March. Compared to less than $100 billion in April last year, investment funds have exploded over the past year.
In contrast, stock trading volumes have significantly decreased. According to investment bank Jefferies, U.S. stock trading volume in April fell 27%, and stock options trading volume dropped 14%, marking the lowest levels since October last year. The European market showed a similar trend. Deutsche B?rse’s trading volume decreased from €206 billion in March to €147 billion in April. The Swiss stock exchange’s trading volume also declined by 20% in April compared to March, recording 1,100 Swiss francs.
With major stock markets soaring to all-time highs, making it difficult to expect additional returns, analysts suggest that investors seeking big gains are flocking to the cryptocurrency market.
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