It has been a tumultuous year for the crypto business. After hitting a high of over $68,000 in November 2021, Bitcoin plummeted around his $20,000 level.
However, some experts advise long-term ETF investors to be cautious about falling cryptocurrencies.
“If you’re investing over the next five to 10 years, this is a normal one-time event in the market and you ignore it,” he added.
But with Bitcoin hitting an almost two-year low, short-term temperament faces a mix of positive and negative factors that will guide where the crypto community goes from here.
Bitwise Asset Management CIO Matt Hougan told Pisani on Monday:
Ethereum’s massive technological upgrade is a positive force for the future of the world’s second largest blockchain, said Hougan. The wave of institutional investors entering the market and the influx of venture capital activity are also positive indicators for the future of cryptocurrencies.
Conversely, regulatory pressure from the Federal Reserve and the Securities and Exchange Commission is against it.
“Cryptocurrencies go up and down creating a volatile market where you don’t know which way to go,” Hogan said. “And I think it’s probably staying there until at least September.”
Edelman explained that regulatory and legislative rules need to be in place for institutional investors to engage with Wall Street companies, endowments and pension funds.
“The adults in the room recognize that regulation is a good thing,” Edelman said. “Right now, 1% are involved in cryptocurrencies. The remaining 99% will not get there until they clarify what the rules of the road are.
“New regulations have been announced by the Treasury Department, IRS, FINRA and Fed,” he said. “And from the SEC and CFTC. There are over 50 bills in Congress right now. They’re all very sound.”
SEC Chairman Gary Gensler has said the SEC should have a primary enforcement role with respect to cryptocurrencies, especially tokens. In a speech earlier this month, Gensler issued a warning to organizations that appear to be violating existing securities laws and urged staff to “fine-tune the compliance of cryptocurrency security tokens and intermediaries.”
“I think there was a fairly direct threat to cryptocurrency exchanges. coin baseHogan said, “They are clearly on his horizon.”
In July, the crypto company’s shares fell after it was announced that the platform was facing an SEC investigation over whether it offered unregistered securities.
Coinbase Chief Legal Officer Paul Grewal said, “I would like to reiterate that our rigorous scrutiny process (a process already reviewed by the SEC) has resulted in securities leaving our platform. I am confident,” he said. on Twitter.
Proposals to increase SEC oversight of the cryptocurrency community are likely to face hostility from the community itself, but authorities are already taking steps to implement the regulatory agenda.
In February, the SEC indicted BlockFi Lending for failing to register an offer and sale of a retail cryptocurrency lending product. The company agreed to settle the claims by paying a $50 million penalty and to stop selling unregistered offers and loan products.
“A year from now, large exchanges will be in the process of registering with the SEC,” Hougan said. “Individual tokens, I think, are longer term.”
While speculative assets have a bumpy road ahead, Edelman said the number of people owning cryptocurrencies continues to grow steadily.
“What is interesting is that [Coinbase is] It’s down 70% from its high, but the number of people owning it hasn’t changed,” he said.
Beyond the cryptocurrency community, Hogan said the adoption rate from large investment firms shows that digital currencies are being embraced by Wall Street.
“The arrival of Blackrock and Schwab is a reminder to everyday investors that Bitcoin is not going away,” Hougan said. “I think it’s settled by now. That’s how big the future is.”