As the digital currency market continues to develop, Bitcoin is facing a series of new challenges and perception issues. As of now, the price of Bitcoin is $34,700, and it has experienced a slight decline on Tuesday, down 0.3%. The U.S. Securities and Exchange Commission (SEC) is grappling with a series of issues, one of which is the difficulty encountered in recruiting cryptocurrency experts, partly due to restrictions on employees owning digital assets. At the same time, the Bitcoin network is experiencing a large backlog of transactions, causing transaction fees to surge by 4,000%. In this context, investment heavyweight Cathie Wood remains a staunch supporter of Bitcoin and advocates its advantages over traditional assets such as gold and cash, especially in a potentially deflationary economic environment. All these factors together form a complex background for Bitcoin's recent price fluctuations.

The SEC’s Crypto Hiring Challenge: Employee Ownership Limits

The SEC's Office of Inspector General has released a report highlighting the challenges the agency faces in recruiting cryptocurrency experts. The study points to a scarcity of qualified candidates, stiff competition from the private sector, and applicants' reluctance to divest their cryptocurrency assets due to SEC regulations prohibiting employees from owning such assets. Meanwhile, the SEC has stepped up its enforcement actions in the cryptocurrency space, filing lawsuits against individuals and companies, including Justin Sun and Do Kwon, as well as entities such as Gemini, Genesis, Binance, and Coinbase.

The challenges the SEC faces in acquiring industry expertise could impact its ability to effectively regulate the cryptocurrency market, which could have an impact on Bitcoin prices. Bitcoin’s Blockchain Bottleneck: Transaction Backlogs and Fees Surge As of November 2023, Bitcoin’s transaction backlogs and fees have risen dramatically. Since September 15, which marked the end of a period of reduced activity, the Bitcoin mempool has accumulated more than 157,000 unconfirmed transactions, and fees for high-priority transactions have climbed to $3.38. This sharp rise in congestion is largely due to the resurgence of the ordinal inscription, which processed nearly 700,000 transactions on November 4, making it one of Bitcoin’s busiest days. Over the next two days, more than 800,000 transactions poured in, exacerbating the mempool backlog and raising transaction costs. Notably, the average fee for high-priority transactions has risen 4,125% to $3.71 since October 3. This increase in activity and rising fees highlight network congestion and scalability issues within the Bitcoin ecosystem, which could impact Bitcoin’s market price.

Cathie Wood's bold view: Bitcoin is more bullish than gold and cash in a deflationary future
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In an interview with Bloomberg's "Merryn Talks Money" podcast, Cathie Wood, CEO of Ark Investment Management, said that she prefers Bitcoin to traditional assets such as cash and gold. Regarding Bitcoin's ability to fight inflation and deflation, Wood firmly believes that if she were to make a ten-year investment, she would choose Bitcoin without hesitation. She emphasized Bitcoin's digital attributes and its ability to attract young investors. Due to Wood's optimistic attitude towards Bitcoin and her prediction that the United States is about to usher in a period of deflation, more people may have confidence in Bitcoin as an asset, which may have a favorable impact on its price.

While the controversy over the FTX case has not yet subsided, there is another important news in the cryptocurrency community. Ethereum, the core blockchain platform for many decentralized applications, has recently suffered allegations of fraud and corruption that may dwarf Ethereum's previous scandals. Steven Nerayoff, a former consultant to Ethereum, claimed that co-founders Vitalik Buterin and Joseph Lubin engaged in fraudulent activities that were worse than those in the FTX case. Ethereum has long been praised for its decentralized spirit and blockchain technology breakthroughs. However, Nerayoff's recent allegations paint a disturbing picture of digital currency management practices, casting a shadow on its reputation.