SEC Chairman Gary Gensler Criticizes the Crypto Industry and Bitcoin's Role
Table of contents
Bitcoin's Limited Role as a Payment System
In addition to his criticisms of the broader crypto landscape, Gensler poured cold water on the idea of Bitcoin becoming a widely adopted means of payment. He pointed out that, while Bitcoin was originally envisioned by its creator Satoshi Nakamoto as a "peer-to-peer cash system," it has not gained significant traction as a viable alternative to fiat currencies like the U.S. dollar.
Although there were initial signs of merchant adoption, such as BitPay's surge in activity in 2013, Bitcoin's potential as a mainstream payment method has largely fizzled. In 2017, Morgan Stanley reported a decline in the number of merchants accepting Bitcoin, citing expensive and slow transactions, along with price volatility, as major obstacles.
The Shift to Store of Value
As Bitcoin's utility as a payment system waned, advocates shifted their focus to positioning it as a "store of value," often referred to as digital gold. This narrative has gained popularity in recent years, especially among institutional players like MicroStrategy, which has heavily invested in the cryptocurrency. Despite Bitcoin's scaling solution, the Lightning Network, it has struggled to achieve widespread adoption, while efficient centralized payment systems continue to dominate.