Last week, the SEC's Investor Advisory Committee convened to discuss blockchain technology and blockchain systems in securities markets. Throughout the meeting, committee members and industry
Last week, the SEC's Investor Advisory Committee convened to discuss blockchain technology and blockchain systems in securities markets. Throughout the meeting, committee members and industry experts debated whether bitcoin and other cryptocurrencies hold real value as stores of value.
From the start, IAC members demonstrated skepticism toward the sector. When IAC member Stephen Holmes asked whether blockchain technology could retain any value in a world where cryptocurrencies no longer existed, Chain CEO Adam Ludwin offered a direct rebuttal.
"Cryptocurrencies will not go away, ever," Ludwin said. "There's an economic incentive for them to exist and there's a big world out there and lots of different jurisdictions, so they'll exist somewhere."
Nasdaq's Fredrik Voss, the company's Vice President of Blockchain Innovation, picked up on the same point. He framed the durability of cryptocurrencies in terms of basic economics. "[A cryptocurrency] will be valuable as long as there are two people who think that it has value," Voss said. "And that is, to Adam's point, quite likely to exist for a long period of time."
Ludwin built on this argument by drawing attention to how public sentiment toward emerging technologies shifts over time. He pointed to the rapid growth of encrypted messaging tools following Edward Snowden's revelations about NSA surveillance as a concrete example of this dynamic. When the public becomes concerned about privacy, adoption of protective technologies accelerates. "Encrypted messaging is now mainstream," Ludwin observed. He then offered Trump's election as another example of how conditions can change without warning. His argument was that cryptocurrencies would follow a similar pattern as long as people perceived an incentive to use them.
The debate then moved to a more specific question: could bitcoin function as a store of value? Holmes pressed this issue, expressing skepticism in a tone dripping with doubt. He focused his question on supply constraints, asking how an asset with a fixed limit could stabilize enough to anchor value in the way traditional stores of value do.
Ludwin turned to gold for his framework. "Gold is a store of value because it has a finite limit, and the same is true of bitcoin," he explained. He traced bitcoin's intellectual lineage to Nick Szabo's Bit Gold research, characterizing bitcoin as "a very slight evolution" of that earlier work. Ludwin pointed to bitcoin's price trajectory as evidence for his position. "It's certainly a store of value if you're willing to ride the ups and downs," he said, acknowledging the extreme volatility but arguing that price swings don't negate the underlying function.
Jeff Bandman, a principal at Bandman Advisors, conceded Holmes's point about the risks involved. "I think you're right to be skeptical," Bandman said, endorsing the committee member's caution about bitcoin's uncertain future price movements.
Anne Simpson, an IAC member, brought the discussion into historical context. She invoked two well-known examples of value that rested on collective belief: cowry shells, which societies once treated as money, and the Dutch tulip bubble of 1637, when bulbs commanded extraordinary prices despite their lack of practical value. Both examples hinged on shared conviction. "You can't eat bitcoin," Simpson pointed out, highlighting the absence of any practical utility. She then made an even more pointed comparison, likening bitcoin to Tinkerbell from Peter Pan, the fairy who exists only because children believe in her. The implication was clear: bitcoin's value, like Tinkerbell's existence, depends on faith.
Simpson, however, didn't view this as a flaw in the cryptocurrency argument. "But that's how markets work," she said.
