**Bitcoin to Consolidate the Crypto Industry Amid Regulatory Pressure**
MicroStrategy founder and executive chairman Michael Saylor believes that the crypto industry will consolidate around Bitcoin following the Securities and Exchange Commission’s (SEC) lawsuits against major crypto exchanges Binance and Coinbase. In an interview with Bloomberg TV, Saylor stated that regulators have taken a narrow view of what a crypto exchange should be and have shown a lack of love for crypto tokens.
– Regulators’ Perspective on Crypto Exchanges
According to Saylor, regulators believe that crypto exchanges should primarily trade and hold pure digital commodities like Bitcoin. Based on this perspective, Saylor predicts that the entire industry is headed towards a rationalization that focuses on Bitcoin, along with a select few other proof-of-work tokens.
– Bitcoin’s Growing Dominance
Bitcoin’s dominance in the crypto market has been steadily increasing, reaching about 48% compared to 43% at the end of February, according to CoinMarketCap. Saylor even suggests that Bitcoin’s dominance could eventually reach 80%.
– Impact on Exchanges
With the potential consolidation around Bitcoin, exchanges may face challenges. Coinbase, for instance, has been trying to diversify its revenue streams to reduce its reliance on trading fees due to regulatory pressure. However, if Bitcoin continues to dominate and trade alongside a smaller group of currencies, it could further impact the exchange’s revenue.
Coinbase reported a decrease of nearly two-thirds in trading fees for the first quarter, dropping from $1.013 billion to $374 million. Although trading fees accounted for 86% of first-quarter revenue last year, this year they contributed to just under half.
**Exchanges’ Continued Relevance and Expansion**
Despite the potential consolidation around Bitcoin, Saylor remains confident that exchanges will still play a crucial role in the industry. However, it is important to note that several exchanges and crypto companies are already exploring opportunities abroad. For instance, Coinbase recently launched an international exchange in Bermuda, and other companies are seeking a presence in Hong Kong, following China’s potential embrace of crypto.
Saylor believes that many institutional investors are hesitant to enter the crypto market due to the wide range of cryptocurrencies available. If the industry becomes more Bitcoin-focused, these investors may find it easier to navigate and consider investing. Despite Bitcoin’s recent slump in value, Saylor, a long-time proponent of Bitcoin, maintains his confidence in the digital asset.
**MicroStrategy’s Accumulation of Bitcoin**
As the founder of MicroStrategy, Saylor has been instrumental in the company’s strategy of accumulating billions of dollars in Bitcoin. Despite stepping down as CEO last year, Saylor has continued to advocate for Bitcoin. As of April, the company held approximately 140,000 Bitcoin, purchased at an average price of $29,803. Although the value of these holdings has decreased by about $1 billion since April, they are currently worth $3.6 billion as of Wednesday.