Cryptocurrency Space's “Regulatory Picture” Is Improving, Says Wall Street Analyst Tom Lee

Francisco Memoria
  • Bitcoin bull Tom Lee has recently argued the cryptocurrency ecosystem's "regulatory picture" is improving.
  • This as various companies are "running towards" regulations, which could potentially affect bitcoin's price.

Fundstrat Global Advisors’ co-founder and well-known Bitcoin bull Tom Lee has recently weighed in on the cryptocurrency ecosystem’s regulatory outlook, and argued it is currently improving, which may reportedly help cryptocurrency prices rise.

In a note sent to clients, as reported by CNBC, the Wall Street analyst wrote:

"We believe the regulatory picture is now improving — best evidenced by Coinbase and Circle 'running towards' regulation. We are basing this on the notion that Coinbase and Circle would only take these actions if such was the case."

Tom Lee

Goldman Sachs-backed Circle, which recently acquired Poloniex for $400 million, is looking to acquire a federal banking license, and plans on registering with the US Securities and Exchange Commission (SEC) as a brokerage and trading venue to help investors buy and sell tokens deemed securities.

Coinbase, one of the largest crypto exchanges in the United States, is as CryptoGlobe covered one step closer to becoming the first SEC-regulated exchange, thanks to its acquisition of securities dealer Keystone Capital.

In his note, Lee added that Fundstrat believes both companies would “only make these moves if their perception of regulatory risks in crypto was improving. The Wall Street analyst further touted their announcements as an “implicit acknowledgement that the regulatory tide is shifting.”

Lee has in the past argued bitcoin’s price has been affected by regulatory uncertainty, specifically after he predicted the flagship cryptocurrency could surge as much as 70 percent during this year’s Consensus conference, when in reality it dropped nearly $2,000.

Per Lee, this uncertainty has been holding back demand, while preventing institutional investors from entering the market. SEC chairman Jay Clayton has recently shed some light on how cryptocurrencies are seen by the regulator, as he revealed cryptos like bitcoin aren’t seen as a security, while tokens issued through initial coin offerings (ICOs) often are.

According to Robert Cohen, chief of the Cyber Unit in the Division of Enforcement at the SEC, the regulator is looking to police crypto markets, without stifling innovation. Cohen was quoted as saying:

"We want to encourage innovation and new ways of raising capital. If there's a new and exciting tech people should have an opportunity to invest in it."

Robert Cohen

Notably, Tom Lee is known as a “bitcoin mega-bull,” as his price predictions see the cryptocurrency hit $25,000 by the end of the year, and $91,000 by March 2020. A few days ago, the mega-bull refuted various bearish arguments against the cryptocurrency and maintained his bullish price predictions.