KEY POINTS
- "For crypto: There's no inherent value. There's no cash flow. There's no yield," says John Reed Stark
- According to him, prices hike because there is no regulatory oversight and because people can sell the hype
- Bitcoin was trading in the green zone at $41,614.88 as of 11:03 a.m. ET on Monday
John Reed Stark, the former chief of the Office of Internet Enforcement at the U.S. Securities and Exchange Commission (SEC), took a snipe at the crypto industry, particularly at Bitcoin's price rise, saying cryptocurrencies have "no inherent value."
His comments come amid the festive mood in the cryptocurrency market because of the significant gains seen in the majority of the crypto assets at the start of this week. The crypto market is currently a sea of green, as Bitcoin, the world's largest crypto asset by market cap, leads the digital assets in a price rally that benefited most crypto holders.
But, not all were pleased with the current market rally, as Stark, a staunch crypto detractor, castigated Bitcoin and the broader cryptocurrency industry.
In a lengthy post on the social media platform X (formerly Twitter), Stark said, "Trying to explain why bitcoin's price continues to rise is like trying to describe the clothing worn by poltergeists."
"For crypto: There's no inherent value. There's no cash flow. There's no yield. There's no employees. There's no management. There's no balance sheet. There's no product. There's no service. There's no history of operations. There's no analytical valuations. There's no earnings reports. There's no proven track record of adoption or reliance. There's no data of any kind except for analytics relating to crypto speculation, which are inherently suspect (e.g. the reported 90% likelihood of the SEC's approval of a bitcoin spot ETF, which is absolutely absurd)," Stark's tweet read.
The senior lecturing fellow at Duke University School of Law also gave two reasons as to why, according to him, crypto prices spiked.
"Crypto prices go up for two reasons: First, because there is no regulatory oversight to prevent market manipulation and Second, because people are able to sell hyped, FOMO'd and overpriced crypto to a 'greater fool,' whether or not the crypto is overvalued. That is, of course, until there are no greater fools left, and then it all comes crashing down," the former SEC chief said.
Trying to Explain Why Bitcoin’s Price Continues To Rise Is Like Trying To Describe The Clothing Worn By Poltergeists
— John Reed Stark (@JohnReedStark) December 4, 2023
For crypto: There's no inherent value. There's no cash flow. There's no yield. There’s no employees. There’s no management. There’s no balance sheet. There’s no… pic.twitter.com/Auq4QapmNC
"Crypto has failed miserably in its mission to serve as cheap online cash; failed miserably in its promise to solve the problem of financial inclusion; and failed miserably in its goal to evolve into a true store of value. Nonetheless, crypto keeps on reinventing itself while its manipulation by a few Big Crypto fat cats keeps the celebration going," Stark said.
"The stark reality is that terrorism, crime and pure speculation are the only actual crypto utilities. Yet, crypto enthusiasts continue to promise that crypto must be the solution to something - but precisely what remains a mystery," he added.
While Stark posted his criticism against Bitcoin and the broader cryptocurrency industry, Bitcoin briefly traded at the $42,000 territory.
Bitcoin, the world's first-ever crypto asset, was trading in the green zone at $41,614.88 with a 24-hour trading volume up by 102.40% at $34.28 billion as of 11:03 a.m. ET on Monday.
BTC's price action represented a 5.10% increase in the past 24 hours and an 18.3% gain over the past seven days.
Data from CoinMarketCap revealed that BTC's circulating supply stands at 19.56M BTC, with its value continuously climbing by 5.06% at a $814.07 billion market cap.
