Bitcoin investment popularity 'is a longer term story,' Coindesk editor says

CoinDesk Global Macro Editor and Anchor Emily Parker joins Yahoo Finance Live's Zack Guzman to discuss the rise in bitcoin holders in 2021 as it returns to over $50,000, in addition to touching upon government regulations on stablecoins.

Video transcript

- Welcome back to Yahoo Finance Live as we have been digging into this sell-off in crypto. Now a rebound across every part of the market, not just stocks, but also Bitcoin moving back above that $51,000 level as omicron fears start to boil off a little bit here. Optimism returning to the market. Of course, a lot of questions around the macro adoption of Bitcoin out of this too, whether or not it should be looked at as a risk on or risk off asset and hedge for inflation. For more on all that, I want to bring on Emily Parker, CoinDesk Global Macro Editor and CoinDesk TV Anchor, joins us once again here.

And Emily, I mean, we've been having this debate, but also interesting to see a report from Grayscale coming out around adoption and how many Americans are actually invested in crypto. In a survey of 1,000 people, a quarter saying they already own Bitcoin, and of that 55% saying they started investing in it this year. So I mean, I don't know, some of these surveys are out there, and never know whether or not to trust them. What do you make of maybe where we're at in, I guess, this adoption cycle?

EMILY PARKER: Well, that's a very important statistic, because again, we have to look at Bitcoin over the long term. Bitcoin is a notoriously volatile currency. It did crash this weekend, but if you look at the year, Bitcoin is up almost 80% year-to-date according to CoinDesk's Bitcoin price index, right? So this is a longer term story. And yes, if you have that many Americans buying Bitcoin, the other thing that's important about that is right now we're at a moment where Washington is deciding how to regulate Bitcoin, right? And the more Americans that have a stake in it, the more active they're going to be in pushing for crypto-friendly legislation. So this actually has an important political impact as well.

- It does. And obviously, also not just Bitcoin they're regulating here, but also stablecoins, and we've been seeing that, I guess, internationally as well. Japan reportedly potentially looking to bring more regulations to stablecoins as well, leaning into banks. I mean, when you back up and look at the US's stance on regulation and put it into the context of other countries around the world, I mean, what are you seeing, and maybe some shifting or hawkish or dovish when it comes to how they want to rein in crypto altogether?

EMILY PARKER: That is really the big question right now. So you know, we have SEC Chair Gary Gensler, there's definitely mixed views on how he's approaching the cryptocurrency industry. I think there's a lot of people inside the industry that think that he is actually quite enforcement-oriented and rather strict. In terms of stablecoins, yes, there have been suggestions that the US will start regulating stablecoins basically the same way that they regulate banks. That's not necessarily a bad thing. That's kind of similar to what Japan is doing. But what we do know is we're going to see more crypto regulation coming, there's absolutely no question about that.

- Yeah, and I mean, we've been watching too, now you have a bunch of crypto leaders in the space getting called to testify in front of the house. You got Sam Bankman-Fried, the CEO of FTX, as well as Jeremy Lehrer, Circle's CEO on the stablecoin front. So there's going to be a lot of questions asked there. I'm not-- I'm not sure if they're going to be good questions, but we're going to watch questions asked. And Emily, I mean, when we look at maybe I guess where we go from here, right, obviously, it's been a very interesting year.

But when you kind of step back and think about maybe some of those next items to be addressed outside of regulation, what are you watching, I guess, in terms of where the sector has been putting a lot of the emphasis? We've talked a lot about Layer 1's Avalanche Solana catching a lot of steam this year in terms of taking on Ethereum. We've talked a lot about Ethereum outpacing Bitcoin. What are you most maybe interested in as we wrap up 2021 and look ahead to next year in terms of where these things, these storylines go?

EMILY PARKER: Yeah, you're raising a really important point, because a few years ago, everyone was just talking about Bitcoin, that was the big crypto story. But there's so many other themes right now in the cryptocurrency space. So there's decentralized Finance, or DeFi. There's the NFT space, which is just exploding. And then there's also just all this conversation about the Metaverse and where the Metaverse is going. And as you just said, that's one of the reasons why we are starting to see some different trends in performance between Bitcoin and Ethereum, because they're actually quite different. And Ether is associated with DeFi, it's associated with NFTs, it's associated with a lot of this Metaverse activity. So there's so much happening in the crypto world outside of Bitcoin itself.

- It has been fascinating to watch, and to me personally, just fascinating to see some of these projects up on a day when Bitcoin's down. The market is not at all what it was just a year ago. So it's wild how quickly these things are moving.

EMILY PARKER: Exactly, yeah.

- Emily Parker, CoinDesk Global Macro Editor and CoinDesk TV Anchor. Thanks again.