Regulation will accelerate Bitcoin adoption, expert says

All the regulatory actions in Europe are good for Bitcoin (BTC), said MicroStrategy’s co-founder and Executive Chairman, Michael Saylor. The company's latest Bitcoin service is set to debut in the US before entering other markets, he added.

Saylor, one of the biggest Bitcoin bulls, made these remarks during an interview on the sidelines of BTC Prague, a major European Bitcoin conference, this past weekend.

“I think all the regulatory actions [in Europe] are going to accelerate Bitcoin adoption, it’s good for Bitcoin. It’s differentiating Bitcoin from everything else. Accelerating rationalization and conversion of all the rest of the crypto world to Bitcoin-focused projects and strategies,” he said.

Similar trends are also noticeable in the United States, where regulators are currently clamping down on multiple altcoins, while leaving Bitcoin aside.

Meanwhile, last week, the European Union's Markets in Crypto Assets law (MiCA) was published in the Official Journal of the European Union. The law will be gradually implemented starting on June 30th, 2024. Although MiCA primarily concentrates on regulating centralized crypto platforms like exchanges, it does not explicitly mention BTC or any other specific cryptoasset.

At the same time, certain national regulators in Europe have already confirmed that cryptoassets such as BTC and ethereum (ETH) are not considered securities due to their decentralized nature. The status of ETH in the United States, however, remains undefined.

Nevertheless, European regulators may still adopt an unfavorable stance towards Bitcoin. For instance, MiCA leaves room for cracking down on Bitcoin mining due to misconceptions surrounding its environmental impact.

Furthermore, a recent study commissioned by the European Parliament Committee on Economic and Monetary Affairs reiterates previously debunked misconceptions about Bitcoin mining and suggests introducing "financial regulation" that "could further enhance [Bitcoin's] energy efficiency."

Lightning services to debut in Q3

MicroStrategy expects to bring its new Bitcoin offering to the market at the end of the third quarter, according to Saylor.

“At that point we’ll start working on pilots,” the Executive Chairman said, adding that the company is now lining up custodians in the US. The new service, known as Lightning Rewards, is powered by the Lightning Network (LN), a second layer scaling solution for Bitcoin. It aims to enable companies to incentivize their employees, loyal clients, and "anyone" else by providing BTC rewards directly into their LN wallets for completed tasks.

This new service will initially be available in the US only.

“[For Europe], we don’t have a time frame yet, but I would guess — next year. [Expansion in other regions] will depend on our experience in the US and Europe. If it’s successful, then, I guess, we’ll go everywhere,” Saylor added.

He also noted that MicroStrategy’s experience with internal testing of this service “is enthusiastic.” According to a source familiar with the situation, employees were initially hesitant about using the new system. However, their enthusiasm grew once it was implemented. The source mentioned that offering BTC rewards for attending team video calls, for example, helped to increase the participation rate.

The company announced the new service last May.

The beginning of Bitcoin strategy

MicroStrategy is one of the largest BTC holders. The company started buying BTC in bulk in the summer of 2020, and now its portfolio is BTC 140,000 ($3.66 billion) heavy. The company spent $4.172 billion to acquire this stash.

According to the co-founder, who was also the CEO at the time, there was no opposition to this strategy within the company.

“But what we did was we took our time and educated all the officers and all the directors and we spent a lot of time answering their questions [....] and it took us a number of months,” he said in the interview. Subsequently, outside law firms and accounting firms had to be educated about this new strategic direction of the company, which positioned MicroStrategy as one of the most influential players in the BTC market.

At the time of writing, BTC trades at $26,132 and is almost unchanged in a day. The price is up almost 9% in a year, but still down 62% from its all-time high of $69,000, reached in November 2021.

About the author: Linas Kmieliauskas is a Bitcoin and crypto journalist, editor, founder of the newsletter.

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