Crypto is not immune to regulation, the approach of the United States is extremely harmful
Crypto is not immune to regulation, the approach of the United States is extremely harmful
the central theses
- The tough access of the US regulators continues. Coinbase and Binance were sued last week and a list of tokens was classified by the SEC as securities
- crypto.com closes its institutional stock exchange and justifies this with the lower demand due to the latest events in the industry
- retail will always have access to cryptocurrencies, but institutional capital will disappear what will dampen the future development of the industry, writes our research manager
The great regulatory passage against the US crypto industry is in full swing. Some believe that crypto will be fine. This is only the latest hurdle on the way to an industry that has always seen itself as an outsider, they say. Crypto is naturally decentralized and can also be shifted abroad.
as far as I am concerned, I'm not so sure. I don't think the SEC can paralyze the entire cryptocurrency industry, but I think it can paralyze the American crypto industry. And that represents a problem. This represents a problem.
The USA are the largest financial market in the world. In particular, I consider crypto, triple-a rel = "nofollow noopener" target = "_ blank" href = "https://triple-a.io/about/"> estimates 45 million crypto owners live in the USA alone, only behind India and China. But the real story may go beyond retail figures here. The real story could be institutional money.
someday in 2021 it seemed as if crypto really penetrated into the mainstream and established itself as a separate investment class. The climb took place, and for the first time in the history of cryptocurrency there was a noticeable movement institutions in the room. Tesla bought Bitcoin worth $ 1.5 billion in February 2021 for his balance sheet. In June of the same year, El Salvador Bitcoin declared a legal means of payment. Three months later, Proshares launched the first Bitcoin ETF based on Futures, which is traded on the New York Stock Exchange under the ticker symbol "Bito".
It was no longer a niche toy for cryptography enthusiasts on the Internet. It was a financial asset with concrete macroeconomic effects, and the fund managers wanted to get involved. The demand exploded. The Bito mentioned above became the most successful new ETF in history and attracted tributaries of $ 1 billion (!) In the first week.
Today the development is exactly the opposite. Not only have prices and volumes broken into (Bito lost $ 1.2 billion in investor funds in the first year, the worst debut year of an ETFs), but also the call of crypto was clouded by several sensational scandals, which, above all, grasped the market in particular the collapse of FTX and Terra.
and now the regulatory authorities are exerting pressure. Regardless of whether you agree or not, the reality is that the law takes up cryptocurrencies hard. The two largest stock exchanges, coinbase and Binance were sued last week and a number of cryptocurrencies were declared as securities by the SEC.
The effects are already noticeable. Robinhood announced that customers can no longer deal with Solana, Polygon and Cardano. It was three of the tokens that were officially classified by the SEC last week as securities. Etoro announced Something similar on this Monday-suspension of trade for US customers: polygon, Algorand, Decentraland and Dash.
While these two steps affect retail than institutions, the former traditionally less susceptible to regulations when it comes to crypto. The reason why so many companies in this area were determined to put on Bitcoin ETFs was that regulation made it so difficult to invest funds in Bitcoin. It was much easier for individuals.
But since regulation displaces the industry from the USA - which is apparently the case - this makes the prospect of investing in cryptocurrencies much more difficult, especially for institutions. And apart from the sheer logistics and legality, which makes it increasingly difficult to keep an overview, it also throws a much less desirable light on the matter.
With what means are customer funds assigned to a sector in which CEOs denounce the SEC on Twitter? Which funds want to shop in an industry that seems to be confronted with new lawsuits every day? Do not forget that these legal problems are due to one year in which prices have dropped spectacularly and ramparted scandals.
The sobering reality is that the access of the regulatory authorities harms cryptocurrencies immensely, since it is becoming increasingly difficult to imagine that US institutions and "Wall Street" capital penetrate this area. At the weekend, Crypto.com even announced the closure of his institutional stock exchange and referred to a lack of demand due to the events in the industry. The retail platform remains fully functional.
As I said above, I don't think this is a terminal for crypto. Especially for Bitcoin (if you still see this in the same category as crypto, which I personally don't do), it will probably be fine. But the trajectory on which the entire room was previously was no longer available. And if the regulation in the United States continues to turn the screw, the sector is cut off from the world's largest financial market. Private customers can continue to buy cryptocurrencies, albeit with more effort. However, it may not be so easy for institutions.
do not deceive yourself, this is a massive problem for crypto, no matter what some cohorts about decentralization or any other kind of immunity argue that may praise the industry. The US market is too big, and even if crypto flourishes elsewhere, it will never reach the same highs without the United States.
Source: Coinlist.me
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