Crypto Regulations Soon? - Good Or Bad?

I think that every crypto investor or holder should listen to what Kevin O’Leary said recently. For those of you who do not know Kevin, Mr. Wonderful is very known from the famous TV-Series Shark Tank and is therefore a businessman and investor. He is a very experienced and accredited investor and he is one of the people that Cryptocurrency was able to change! In 2017 he was one of the biggest opposers to this very young technology but in recent times he is definitely becoming a fan and believes that Crypto will become the 12th sector of the S&P! In a recent interview he talked about the current situation and this is what I want to discuss with you in this article today.

Topic Of Regulation

In general O’Leary sees an incredible potential in crypto. He also always refers to crypto as software which is why he does not see it as a currency so to speak. O’Leary always stresses that he does not know which one of the many crypto projects will be successful in the end, which is why he is diversifying his portfolio onto all the blockchain project out there and has around 30 positions. Furthermore, he always compares crypto to the Dot.Com Bubble and brings the example of Amazon. The stock of Amazon corrected every year around 50% and the same he sees with the crypto industry.

In his eyes Stable Coins are the biggest advantage at the moment. A transfer in the traditional financial sector can take up to three weeks, especially with the sums that he is dealing with. On the other side we have crypto transactions that are done in a few seconds and are also transparent on the chain. For O’Leary compliance right now is the most important part of his job if he wants to get in touch with this young industry. He does not want to be a crypto/ DeFi Cowboy. He really wants crypto to become the 12th sector of the S&P and this would benefit the current people that are already invested in crypto. The reason for this is that around 95% of institutional money is still not invested as he says. Many people are thinking that the institutional money is already here but the big players are still waiting on the side lines.

In order to get these big players to participate and be able to invest in crypto, the main goal is compliance. This is best done with regulations and Kevin sees the first step being done in the stable coin sector. One of the biggest incentive for US regulators to attack this point as soon as possible is that this would almost guarantee a great spot for the US Dollar in the global economy and would secure its current status. Many people are still trusting the dollar and certainly do not want a Digital Yen, Yuan or Euro. His expectation is that the regulators will regulate the stable coin market with the rules of being backed only by real assets. No algorithmic stablecoins would be allowed and shady companies like Tether will have a difficult time.

Great Opportunity?

So is the current situation a great opportunity for retail investors? The prices seem to be very low and with regulations possibly around the corner a lot of investors are waiting on the sidelines to jump into the markets. In my opinion, right now is a great time to stock up your favorite projects and maybe those you believe in. According to Kevin Trillions of Dollars are just waiting to get invested, which would bring the price of crypto up.

Another positive point that Kevin mentions is that once the big money will be into crypto, the volatility of these assets will become very low. Because of higher liquidity and the general investing model of these big founds, big crypto projects like Bitcoin will almost certainly have a great resistance at a certain price point which will not get passed. According to Kevin these regulation talks will start soon after the mid-terms which are around October/ November this year. I think it will be a very interesting time to follow the markets.

Conclusion

Without a doubt, this could indicate the biggest wealth transfer in recent times and create a generational chance. I think after listening to Kevin O’Leary, regulations in general seem to be not that bad and in favor of crypto projects. They are just setting the playing rules. On the other hand, I feel like crypto is such a place of innovation and also privacy in some occasions that the state feels uncomfortable with. With regulations, some of this freedom will certainly get taken away.

For me it feels like a pact with the devil. Yes, on the on hand we are getting a potential chance of getting a lot of wealth, especially if you are invested in to the right projects. On the other hand you are pretty much selling the soul of crypto that was the initial incentive behind this whole industry. It will certainly be difficult to keep all of the positive things of DeFi or the decentralized form of Bitcoin if the state regulates too much. But maybe the regulators will have a very soft take on this topic.

I must admit that the idea of trillions of dollars flowing into the industry does not sound completely bad, but at what price? I would really be interested in your take on this topic! 😊

Published by ga38jem on
Steemit
On 2nd July 2022