The AMA covered an array of questions regarding a number of topics including regulations, transparency, institutional investment, the growth of Ripple, whether XRP is a security, and more.
One question that’s been on everyone’s mind is about institutional investment coming to crypto and whether or not a Bitcoin ETF is on the horizon.
Before we delve into the above question, we must first explore what led to it. Garlinghouse was asked which of the predictions he made for the year of 2018 played out.
The first prediction he mentioned was that the demise of the ICO industry would take place in 2018, with fraudsters being penalized and the SEC taking action. This prediction has proven to be correct, and even happened earlier than expected.
Garlinghouse also predicted that there would be an increase in regulation from regulatory bodies such as the Securities and Exchange Commission (SEC) and the Commodities and Futures Trading Commission (CFTC).
Therefore, he was right about this prediction, because the SEC said both Bitcoin and Ethereum are not securities and have taken a more serious stand on the regulation of ICOs and the cryptocurrency market as a whole.
Institutional Investment and the Bitcoin ETF
While Garlinghouse was proven right on the above 2 predictions, he admitted there was one prediction he thinks he got wrong, which was in regard to institutional investment in 2018.
I really thought 2018 was going to be a year where you saw an increasing in participation in the digital asset markets from institutional investors. I think we haven’t really seen that. 6/10 times it has been very very very small amounts and I think that’s largely because the industry hasn’t quite matured to the point where they can participate.
He then said that he will carry this prediction on to 2019, as he believes it will be the year institutions really start coming into crypto with significant investment.
With regards to this last statement, Garlinghouse was asked to predict the decision of the SEC on the Bitcoin ETF approval.
After a short pause, Garlinghouse said he was going to have to dodge this question. However, he did explain that the SEC has a very difficult job, and their decision depends a lot upon the risk of manipulation of a Bitcoin ETF.
Going in to detail, he stated that Bitcoin manipulation was rampant in 2018, and this has not helped the approval of a Bitcoin ETF:
There has been a concentration of mining power amongst fewer miners in the Bitcoin ecosystem and I think that increases the risk of manipulation.
He then ended this topic by saying he believes a Bitcoin ETF would be a great way for institutions to participate. However, he does not have a strong viewpoint on what the SEC’s ultimate decision will be.
Predictions for 2019
As Garlinghouse looked back on his 2018 predictions, it only seemed right he share predictions for 2019 as well.
He predicts that 2019 will be a huge year for transparency, which is imperative for the industry to mature:
There’s a lot of stuff in the industry still that I think is clandestine…. There’s people in the industry that operate without transparency and without clarity. I don’t think that’s good for the industry or for the desire of institutional investors to come into the industry.
He then went on to explain that we will see increasing transparency in a lot of different projects, and this will make the crypto industry more desirable for institutional investors.
Another prediction Garlinghouse made is that banks will begin to actually hold digital assets by the end of 2019:
It’s only a matter of time…. Banks are profit motivated entities and to extent, they see an opportunity to grow their business. I think you’re going to see banks lean in on that.
To get a complete understanding of Garlinghouse’s thoughts and predictions, be sure to watch the full AMA below.
What do you think of Garlinghouse’s 2019 predictions? Do you think the SEC will approve a Bitcoin ETF? Let us know what you think in the comment section below.