Bitcoin barely entered after the Trump administration proposed new cryptocurrency rules a week ago, a documentary sign of investor opinion on the digital coin, Galaxy Digital founder and CEO Michael Novogratz told CNBC on Thursday.
“It tells you about the power of this bull market,” he told Squawk Box. “They throw a lot at the system, and that doesn’t affect it.”
The Financial Crimes Enforcement Network, a division of Finance called FinCEN, on Friday unveiled new disclosure rules affecting private wallets and financial institutions that are expected to crack down on criminal activity involving cryptocurrency. Since then, the price of bitcoin has been set to remain above $ 23,000 on average, according to data from Coin Metrics, despite potential risk.
In an effort to increase transparency, the guidelines require customers to be identified on transactions over $ 3,000 on self-hosted crypto wallets. Crypto platforms were required to report transactions on unopened wallets over $ 10,000 within 15 days.
While bitcoin is not the direct target of and Galaxy does not expect to be affected by the changes, Novogratz said it reflects a common theme in the way the Trump administration governs. He also warned that it could cast a cloud over the crypto industry.
“I hope, you know – that we get a change of guard in 20 days – I hope we get some more open – minded regulators,” said Novogratz, referring to the Biden administration that coming in.
Novogratz is a billionaire former hedge fund manager and philanthropist. He regularly donates to Democratic politicians, including a $ 200,000 donation to the Biden Action Fund in June.
The proposal was introduced by the Treasury about a month before the Trump administration moved out of the White House. He gave a 15-day opinion period on the possible changes, which has been criticized for being torn apart, including by Novogratz, which is claiming a 60-day period.
“It’s a bit endemic of the Trump administration trying to pass legislation, and in reality there are a lot of unintended consequences,” he said. . It’s going to push a lot of the cool stuff that happens in crypto offshore. “
The continued rise in bitcoin is being powered by a wave of institutional investors, a market-moving force, who are betting on cryptocurrency. Novogratz said it sees “no slowdown” in bitcoin adoption among Galaxy clients. Since falling below $ 5,000 during a historic meltdown in coronavirus assets, bitcoin has broken above $ 20,000 for the first time last week.
Earlier this month, Novogratz reported a shift in crypto ownership from individual investors to large currencies. In 2017, he noted, almost all transactions were with individual owners. It expects to see less volatility in digital coins as more institutional investors enter the market, helping to carry bitcoin to around $ 60,000 next year, more at twice the normal rates.
Novogratz, however, hopes it won’t come at the expense of innovation.
“Many of these crypto companies both onshore and offshore are willing to push regulation and build great innovation,” he said. “I want an administration, I want a regulatory framework that provides Inwardly, not fighting that. “