The crypto industry has seen a massive bull run in the second half of 2020 and throughout 2021, eventually ending the year with the start of the new crypto winter. After reaching their peaks in November 2021, the crypto prices started spiraling down, and they never stopped. Now, nearly a full year later, investors are starting to wonder when will the next bull run start, and some experts are offering their take on the current situation.
One of the experts is CK Cheng, a former head of risk at Credit Suisse — a well-known investment bank. Cheng, who left Credit Suisse in uly 2021 to co-fund a new crypto hedge fund, believes that the next major crypto rally will need a specific trigger — regulatory clarity in the United States.
Is the regulatory clarity on its way?
The move that will trigger the next bull run, according to Cheng, at least, is quite a strong requirement. However, on the plus side, he added that he expects the US to bring crypto regulations in early 2023. He claims that there are strong regulatory efforts currently underway in the country which will soon open the doors between the crypto industry and traditional finance.
If true, then his prediction will most likely come to pass. After all, the US is filled with institutional investors, entrepreneurs, and others who are just waiting for the country’s regulators to give the green light before they start investing vast amounts of money into the crypto world. The crypto community is also well aware of this, and so any signs of crypto-related laws and regulatory clarity will most likely spark massive retail investments.
Combined with institutions finally having a green light to move into crypto, this will surely spark quite a positive price behavior. The stage has already been set for institutional involvement, as there are numerous companies offering custody services, crypto portfolios, and generally, easy ways for institutions to access the crypto industry as soon as they decide they are ready for such a move.
Institutions await clarity, and regulators are trying to deliver
One example is one of the world’s largest asset managers, BlackRock, which partnered with Coinbase only last month to offer access to Bitcoin and other cryptocurrencies using Coinbase Prime. Cheng also noted that there is massive interest among institutional investors, and some of them are not even waiting for the regulations — they are moving into the crypto world right now.
Some might be doing it while trying to keep a low profile while others have been more vocal about it, but they are preparing to enter the industry as we speak. He also believes that the US president, Joe Biden, may have unintentionally given a signal for traditional investors earlier this year.
The bottom line is that institutions do not worry about things like liquidity, scalability, volatility, and alike. All they care about is whether or not the regulations are clear enough, and if the upcoming laws fulfill this requirement, the crypto industry will soon receive quite a massive injection of institutional funds.
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