• US regulators scrutinize crypto companies
• Investors want a safe, regulated environment
• Sentiment regarding Bitcoin brightens somewhat
It’s a tough year for the entire crypto sector. The original cryptocurrency Bitcoin, for example, has lost more than half of its value since the beginning of the year. This was accompanied by a deluge of devastating industry news: For example, the multi-billion dollar crypto hedge fund Three Arrows Capital (3AC) went bankrupt and the crypto lending company Celsius Network has frozen customer funds and filed for bankruptcy. The US stock exchange SEC and other authorities have started investigations in this regard.
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And Yuga Labs, the company behind the Bored Ape Yacht Club (BAYC) NFT collection, has also come under the scrutiny of the US Securities and Exchange Commission. The authority is investigating whether the tokenized monkey portraits are tradable financial assets (securities) similar to securities. The question of whether they actually fall under the definition of securities is of great importance, because then they would have to be authorized and regulated by the SEC, and affected companies would also have to disclose certain information to the SEC.
Investors take a positive view of regulation
There are still crypto fans who do not want any government interference in the decentralized currencies, but on the other hand numerous investors see the authorities’ crackdown as positive. As “Bloomberg” reports, these investors are more willing to invest in the crypto sector if it is better regulated.
In the most recent MLIV Pulse survey, almost 60 percent of the 564 respondents said they see the numerous regulatory interventions as a positive signal for the cryptocurrency asset class. “I’m in the yes camp. As a professional investor, you need a regulated investment opportunity and therefore more regulation opens the doors for more professional investors to get involved in crypto,” quotes “Bloomberg” Chris Gaffney. “The more they take crypto out of the Wild West and into traditional investing, the better it will do,” believes the President of World Markets at TIAA Bank.
“Our investors and the market have recognized that decentralized protocols offer unique advantages that benefit not only the crypto market but also the traditional markets,” said Mary-Catherine Lader, COO of Uniswap Labs, in a Bloomberg interview.
Better Outlook for Bitcoin
The more aggressive approach of the SEC also makes the surveyed investors more confident in relation to Bitcoin. Almost half of the survey participants now expect that the world’s largest cryptocurrency by market capitalization will continue to fluctuate between 17,600 and 25,000 US dollars by the end of the year. In the previous survey in July, a majority were even more pessimistic and thought it more likely that Bitcoin would fall to $10,000 than it would climb to $30,000. It should be noted that the participants in the July survey had fewer possible answers than in the more recent survey.
For comparison: Bitcoin is currently at 20,455 US dollars (as of November 1st, 2022). Since the last survey, the ancestral cryptocurrency has been trading sideways in a band between $18,170 and $25,200.
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