Since its all-time high of $69,000 in November 2021, the largest cryptocurrency, Bitcoin, has lost significant market value. Currently, the crypto market has been underperforming over the past couple of weeks, adding to the negative price action of Bitcoin.
Bitcoin is currently trading at $28,000 and is down by over 3% in the past 24 hours. The token has been in an upswing-downswing situation for some time.
However, despite the ongoing market struggle, industry experts are bullish on Bitcoin’s recovery in the short term.
In a recent interview with CoinDesk TV, the CEO of Grayscale, Michael Sonnenshein, expressed his belief in Bitcoin’s resurgence. According to him, Bitcoin will bounce back in the near term, and the crypto market will recover.
Terra Network Collapse
The recent meltdown of the Terra blockchain alongside its UST stablecoin has made headlines for quite some time. The collapse of Terra UST was the main topic of discourse within the crypto space due to its impact on the market.
Accordingly, Michael points out that the collapse of the UST stablecoin, one of the leading ones in the market, has a spillover effect. This means that other stablecoins still standing are now a subject of concern from investors and traders.
Despite being the backbone of the digital asset space, stablecoins are now seen as volatile assets, unlike before. And this is a worrying development the industry must try hard to curb.
Before the collapse, investors were focused on the role of stablecoins in the stability of the ecosystem. Thus ensuring the functions, they are designed to do. However, the recent meltdown of the UST stable has sent shivers across the industry.
Moreover, Michael is confident that Bitcoin and the entire crypto market will soon bounce back from the setback.
What is Grayscale?
The company is one of the biggest players in the crypto industry, with more than $25 billion worth of assets.
Grayscale is a crypto and blockchain service provider that enables institutional investors to access digital assets. Additionally, users can invest in assets like Bitcoin and Ethereum on the Grayscale network.
The company’s novel product, Grayscale Bitcoin Trust (GBTC), is a popular asset amongst large-scale investors. The firm is working on converting the GBTC into an exchange-traded fund (ETF) backed by Bitcoin.
Moreover, Grayscale is waiting on the U.S. Securities and Exchange Commission to approve the conversion. Converting the GBTC into a Bitcoin ETF would boost Grayscale’s service delivery to institutional investors.
However, the SEC has declined Grayscale’s application as it did for multiple Spot Bitcoin ETF applications over the years.
The United States SEC is currently in an ongoing crypto regulation oversight with strict guidelines for crypto service providers. The SEC is attempting to comply with regulations in the crypto industry implemented following the market collapse.
Meanwhile, crypto transactions in the U.S. are still in full gear, but the lack of clear regulations has led to uncertainty. After signing the executive order by President Joe Biden, it hoped that the regulatory issues would be over.