As the global crypto market struggles to surpass $1 trillion in cumulative market cap, Shark Tank star Kevin O’Leary believes that potential upcoming stablecoin regulations could be the next thing to fuel the market.
In a recent interview, ‘Mr. Wonderful’ opined that when “regulations come, Bitcoin goes up,” explaining that “if institutions smelled policy, then you got a real move up.”
Stablecoin regulations could disrupt Bitcoin
O’Leary believes that the Stablecoin Transparency Act has a chance of passing in the U.S. after the Nov. 8 midterm elections. He stated, “Now, this has nothing to do with Bitcoin, but it has a lot to do with the tone of regulation. And the reason I think it’s interesting is they’re trying to solve for the challenges that occurred in these collapses of stablecoins that were built around algorithms, and $62 billion got erased.”
According to the bill introduced in the Senate, a stablecoin issuer is required to hold reserves of either specific government securities, fully collateralized security repurchase agreements, U.S. dollars, or other non-digital currency. The bill specifies a “fiat currency-backed stablecoin is a digital asset backed by a non-digital currency and is redeemable on a one-to-one basis in that currency.”
Moreover, each stablecoin issuer is required to publish a monthly report on the reserves held, audited by a third party.
“This act is very simple in nature, which is why it may pass. It is being supported by both parties. And the reason that’s the case is that secondly, it makes the U.S. dollar, the default payment system worldwide. Which everybody can get behind,” the Shark Tank star said.
“So if you have USDC or any other stablecoin that’s backed by the dollar and the test to get it regulated is very simple. You’re gonna get audited every 30 days, it has to be backed up one to one with U.S. dollar or Treasury bill, all the treasury bills backing the coin or the token have to have a duration of less than 12 months. And if you’re willing to go through that scrutiny, they’ll let they’ll issue you a license.”
BTC price struggles to surpass $20,000
Kevin O’Leary argues that even though the bill doesn’t particularly refer to Bitcoin, the first stablecoin regulations passed by U.S. regulators make for a solid case to be optimistic about BTC.
However, at the time of press, the Bitcoin price was in the 24-hour range of $19,112 and $19,342 on CoinGecko, significantly under the crucial level of $20,000. While the king coin has recorded minor gains in the past day, it has remained mostly range bound in the past month.
According to IntoTheBlock research, 48% of the coin holders are losing money at current price levels. Meanwhile, only 5% are breaking even with the rest of the holders in profit. Most of the on-chain signals at press time remain bearish for BTC.
BeInCrypto research also doesn’t show much optimism in the short term. However, on-chain analyst PlanB believes that BTC has now reset its range, replacing the old low of $4,000 to the crucial level of $20,000.
Despite the slump, the analyst remains optimistic and suggests accumulating more coins at the current levels.
BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.