Esteemed equity research analyst and investment strategist Lyn Alden recently shared her insights at MicroStrategy World 2023, turning heads with her candid assessment of the banking industry and the rising value of Bitcoin.
On May 3rd, 2023, Alden took the stage at the Wallstreet & Bitcoin Panel Session at the Signia by Hilton Orlando Bonnet Creek. Her remarks highlight a stark reality many overlook: banks harbor inherent risks. She elaborated, emphasizing the general lack of transparency concerning the assets banks invest in, which, according to Alden, are often undisclosed to the public.
In light of the ongoing banking crisis, Alden sees Bitcoin gaining favor as a safe haven for investors. She underscored the unique features of Bitcoin – its self-custody nature, non-dilutable assets, and absence of liability – as qualities that are garnering increased attention, particularly in these times of economic instability.
On the first day of April 2023, Lyn Alden stirred up the Twittersphere, asserting that Ethereum ($ETH) might well be classified as a security under the Howey Test.
Alden drew distinct lines between commodities and securities, underlining these classifications’ centralization disparities and possible legal consequences.
Kicking off the Twitter dialogue, Alden stated, “Unlike commodities, securities hinge on a team of salaried developers for their unstaking. Commodities have no such requirement.” Erica Wall chimed in, emphasizing the significance of asset categorization to statists, albeit less to libertarians. Alden further elucidated her viewpoint, stating that her focus on the degree of centralization aids in predicting legal repercussions, rather than expressing her personal opinion on securities regulations.
Upon Wall’s query on whether Bitcoin could be viewed as a security, Alden retorted, “A protocol that didn’t originate from an ICO, and where updates by developers are voluntary (soft fork)? That doesn’t fit into any of the security definitions we currently have.”
The debate took an interesting turn when Real Vision’s CEO, Raoul Pal, joined in, playfully questioning if Alden’s stance on Ethereum’s classification as a security was merely an April Fools’ prank. But Alden was clear on her serious take, retorting, “No; in my view, ETH is still likely a security under the Howey Test. However, that doesn’t mean I’m advocating any particular action.”
Adding another layer to the debate, Alden noted an apparent jurisdictional tussle between the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) over Ethereum, leading to a cloud of uncertainty over the final classification of the cryptocurrency.