What investors need to know

In this week Ether (ETH) has passed the $ 4,000 mark While Bitcoin (BTC), the world’s most popular cryptocurrency, recently hit another all-time high, topping $ 63,000. Dogecoin (DOGE), for its part, remains on the crest of the waves after the “Dogefather” Elon Musk appeared on the Saturday Night Live program and everyone was talking about the news about digital works of art reaching exorbitant prices in the form of tokens that are non-spendable.

Cryptocurrency is in vogue whether you like it or not.

However, not everyone is convinced. Janet Yellen, the newly appointed US Treasury Secretary, previously questioned the legitimacy and stability of cryptocurrencies as a store of value.. After all, we only saw the last Bitcoin price bubble burst three years ago. After a meteoric surge in 2017, with BTC hitting the $ 20,000 mark, a 2018 sell-off brought the asset to a standstill and led to comparisons to “Tulipmania”.

What investors need to know
What investors need to know

Bitcoiners have been dubbed “cultists” because of their zealous support for this new, volatile, and mysterious technology. But make no mistake: it’s not just technophiles and eccentric billionaires like Elon Musk who are diving into cryptocurrency. From JPMorgan to PayPal, real Wall Street characters and Silicon Valley stalwarts have bought bitcoin in bulk..

The amount of BTC in circulation is already over a trillion dollars. Most major financial institutions – including investment giants and payment companies – now support cryptocurrency and The interest of private investors is growing. Bitcoin is becoming an increasingly important part of the global financial system.

At the same time, Bitcoin still exists in a gray area of ‚Äč‚Äčregulation, how Various government agencies have woven a mosaic of cryptocurrency regulations over the past 10 years. In many cases this is mosaic For conventional investors, this is not enough to trust the marketSome of the most fundamental principles of cryptocurrency governance continue to be discussed. For example, are cryptocurrencies viewed as assets or securities? Well it all depends on who you ask …

What Should Investors Know About Cryptocurrency Regulations?

One of the big misconceptions about Bitcoin – and cryptocurrencies in general – is that the market is kind of a “Wild West”: out of the reach of regulators. and full of deceivers, outlaws and thieves. That is not true.

Every business that interacts with consumers in the US and other countries is subject to certain regulations that also apply to digital assets. There may not be a framework built for cryptocurrencies as we are on the edge of a new and disruptive technology. However, different rules apply to the different activities in relation to consumer protection, money laundering prevention, fraud prevention and other areas.. Crypto companies can work with law firms to interpret the rules regarding their business and to adhere to them to the best of their ability.

The current regulation for cryptocurrencies has been worked out over the past 10 yearsbecause regulation has caught up with innovation. That could change soon, though: The confirmation of Gary Gensler – former director of the Commodity Futures Trading Commission (CFTC) who taught courses on blockchain technology and cryptocurrencies at the Massachusetts Institute of Technology – as the new chairman of the commission. De Bolsa y Valores or SEC states this Current management will take digital assets seriously and seek to provide comprehensive prudential and regulatory guidance for this emerging market.

Gensler has hinted that he is waiting for Yellen to complete his review of cryptocurrencies before adopting a regulatory agenda. about you. In the meantime, Congress also studies thoroughly. Legislators filed one last month Bill to create a working group of industry experts and representatives from the SEC and the CFTC to assess the current legal and regulatory framework for digital assets.

It’s hard to predict what we’ll see in the near future in terms of cryptocurrency regulations and the various business models in the sector. However, we have observed this Increasingly, regulators are becoming more sophisticated and constructive, recognizing their duty to actively protect consumers, promote innovation and create a positive business environment.

How can institutional investors trust cryptocurrency companies?

With so many cryptocurrency companies emerging against this confusing regulatory backdrop in recent years, it is important for institutional investors to understand the pitfalls to avoid when choosing a partner to entrust their digital assets to. It is important to know how the company is regulated, information that should be publicly available on its website and should be checked on the regulator’s website.

What’s more It is convenient to understand any business modelbecause not all companies are created equal. The basic concept of the return payment may appear the same, but the risk profile can be very different. If a company is not transparent about how it works and is performing, this should be a cause for concern, and if your prices are materially different from your competitors’ prices, I think it’s important to understand why. The fine print should always be read.

Some companies may choose to work in jurisdictions known for their poor regulation Bypassing supervision has a detrimental effect on confidence building and long-term business. Any company worth working with will work proactively and cooperatively with regulators. It’s a complex landscape that can be expensive for startups but is part of the price of long-term value creation.

Cryptocurrency lenders who want to be at the forefront of the digital revolution must accept government scrutiny threatening and welcome dialogue with regulators. Investors should seek partnerships with companies that value transparency, compliance, experience and fairness..

This article does not contain any investment recommendations or recommendations. All investments and operations involve risk and readers should use their own research to make a decision.

The views, thoughts, and opinions expressed herein are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph

Camilla Churcher is the Global Director of Business Development for the Celsius Network. Camilla has extensive experience in traditional financial services, Wall Street companies, and fintech startups. After completing his master’s degree from the University of Edinburgh, he began his financial career as an analyst for Morgan Stanley and later for Citigroup. In particular, Camilla was Director Prime Derivatives Services at Credit Suisse before becoming Director Preferred Brokerage Sales at Bank of America. Before joining Celsius, she was most recently Sales Director at LGO, an institutional exchange for digital assets.

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