06.12.2021

What is required for institutional investors to accept cryptocurrencies?

Well-known investor and chairman of O’Shares ETFs, Kevin O’Leary, believes that the slow adoption of cryptocurrency by organizations is not related to volatility.

The expert said that the main problem remains the regulatory framework, as well as strengthening supervision over the cryptocurrency sector, including by the Securities and Exchange Commission.

“True institutional capital is not afraid of volatility, is not afraid of disclosure problems – it is concerned about being able to comply with regulatory requirements, ” said Kevin O’Leary of cryptocurrency. However, I am increasing my share from 3% to 7%. “

The top executive noted that the regulatory environment is changing rapidly, and organizations want to make sure they are not breaking laws before turning to digital currencies.

O’Leary added that if organizations can get around the compliance issue, investments in assets like bitcoin would be worth trillions of dollars.

O’Shares ETFs seem to have already found a workaround with the FTX crypto exchange, which will boost digital asset investments from 3% to 7%.

In 2021, one of the highest rates of investment in cryptocurrency by organizations was recorded, as a result of which the value of the main cryptocurrency, bitcoin, rose sharply. In April, the price of BTC hit an all-time high of $ 64,800, more than 3 times the long-held 2017 price record.

Cryptocurrency Adoption Grows Despite US Uncertainty

Over the past couple of weeks, the hottest topic of discussion in the US has been the cryptocurrency amendments in the multibillion-dollar infrastructure bill. This week, Cynthia Lummis, US Senator from Wyoming, expressed optimism about future rules for cryptocurrencies and noted that the US crypto community would be pleased with the result.

Despite the uncertainty of crypto regulation in the most active country using cryptocurrencies, new data suggests that the adoption of cryptocurrencies is steadily accelerating. Global users don’t care too much about US legislation as the total number of international cryptocurrency users has increased from 100 million in January 2021 to over 220 million in June 2021.

Several major representatives of the cryptoindustry commented on the discussion of the amendments and the impact of this process on the sector as a whole.

“If the latest Senate amendment is included in the bill, the impact of this new law will be negligible for organizations outside the United States. Centralized businesses such as exchanges and custodial wallets will be required to provide tax reporting as required by the bill, said WAX co-founder William Quigley.

Alternatively, these foreign companies can ban US citizens from using their platforms. This will be unfortunate for American clients, but we have already seen how this happens with foreign exchanges. This would be a continuation of the trend of denying Americans access to the world’s best platforms. “

Jason Dean, market analyst at Quantum Economics, described the media coverage of the adoption of the cryptocurrency amendments in the US infrastructure bill as an excellent tool for raising awareness of cryptocurrency across the country.

“Several paragraphs in the multibillion dollar infrastructure bill affecting cryptocurrencies were instrumental in delaying the approval of this bill. The media coverage was significant, raising awareness of Bitcoin (and other currencies) in the US, which undoubtedly led to new users in the space.

It is also worth noting the strength of the community, which has come together, mobilizing quickly and efficiently through social media platforms, Dean said.

Let’s not forget that Bitcoin is truly global, and the US represents only a small fraction of global activity. In this regard, legislators should remember that a poorly calculated step will only lead to the removal of the country from innovation and economic activity, which will inevitably continue in any case.

It is very important to take time to ensure the best balance between taxation, reporting and the possibility of continuing this innovation within the borders, which will bring long-term economic benefits to the country, ”the expert added.

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