NYU Professor Scott Galloway says that Tesla CEO Elon Musk is drawing additional scrutiny and regulators to the crypto space. He expects the U.S. Securities and Exchange Commission (SEC) to respond to Musk’s action in the next 30 days. Furthermore, the professor expects to see a Musk coin or a Tesla coin launching soon.
Elon Musk Drawing Regulators to Crypto
Professor Scott Galloway shared his view on the cryptocurrency market in an interview with CNN this week. A professor of Marketing at NYU Stern School of Business, he was named “One of the World’s 50 Best Business School Professors” in 2012. He also founded several firms, including L2, Red Envelope, and Prophet.
The professor calls what’s happening in the crypto market “interesting” as “We now have two entities competing for who has the influence, or more influence, over the markets.” The first is the world’s second largest economy, China, which recently reiterated its crypto crackdown from 2017, creating FUD all over again. The second is the Tesla CEO, Elon Musk, “who is literally making and destroying small fortunes 280 characters at a time,” the professor described.
“I wonder if this gets the SEC into clarifying their viewpoint in what feels like, if you don’t call it market manipulation, market shaping, influence from individuals, specifically Elon,” Galloway opined. While acknowledging that the price of bitcoin is “still up for the year,” he affirmed:
There’s no doubt about it. This is going to draw additional scrutiny.
He proceeded to describe a healthy market where no one individual or company controls any sector, which creates confidence for players to come in and invest.
However, for the crypto market, he said, “We are seeing that, in fact, one individual does have incredible influence over the market,” expecting the SEC to respond at some point. Noting that “It feels like Elon Musk is waving, thumbing his nose in their face,” he said, “It doesn’t feel like a healthy market.”
Bitcoin is not a security, however, so there is a question of whether it falls under the jurisdiction of the SEC, the professor noted, adding that BTC is classified as a type of commodity. “When you see $200 billion wiped off of an asset class because of a tweet, it’s going to inspire some people to reach out to the regulatory agencies and say ‘You need to do something,’ even if it’s clarifying the language on market manipulation,” the professor detailed, elaborating:
I wouldn’t be surprised if they [the regulators] come out and clarify it and don’t even mention Mr. Musk’s name but it will be clear who they are talking about. Something is going to happen here, I think, in the next 30 days.
He added that the regulators could provide “clarification of what the definition of market manipulation is or something more aggressive … I think in the next 30 days we are going to see some sort of a statement or clarification or action.”
Professor Expects to See Tesla Coin or Musk Coin Soon
Galloway also expects Tesla or Musk to issue their own coins. “Elon musk is absolutely setting up a Tesla coin or a Musk coin,” he said. “The reason why is despite how much money these individuals have, I think, every morning they wake up and say ‘hello wealthiest person in the world.’”
The professor described, “Elon musk can probably produce a coin right now and increase his wealth by $50 billion – $100 billion, which is a pretty large incentive.”
He then recalled that the Tesla CEO gave an indication last week that he could be launching his own coin when he responded to a tweet that suggested he should consider creating his own cryptocurrency from scratch. Musk wrote: “Only if DOGE can’t do it. Big pain in the neck to create another one.” Galloway said:
I read as ‘stay tune, coming soon.’
Galloway disclosed that he does not own a single coin. “I am embarrassed to say I am a nocoiner,” he admitted. “I wish I had. Call me a boomer but I can’t wrap my arms around it.” He believes that he understands bitcoin better than 90% of the general public but he still feels like he does not understand cryptocurrency. Nonetheless, he said he is going to invest in Ledger, a company in the crypto space.
The professor concluded:
I think this is a phenomenon I don’t think is going anywhere. But I think we are in a stage where we are going to see a decent amount of fallout and regulatory intervention, which I think will make for a healthier market.