According to many, the recent bull market in cryptocurrencies was mainly driven by important institutions after years of real interest in the market. A positive outlook regarding regulation will also have played a role, but unfortunately there is little left of that now. According to Bank of America regulation will play an important role in the next bull market.
More crypto regulation is needed
That writes CoinDesk, which read a research report from the investment bank from last Friday. “Increased pressure on regulation could encourage more institutional involvement, as well as a shift from speculative trading to projects with real functionality and to companies with [een haalbare] profitability,” emphasize BoA analysts Alkesh Shah and Andrew Moss.
The problems at FTX have once again brought more attention from governments, who are concerned that investors are not adequately protected. This is by no means unexpected. Due to the bankruptcy of the popular exchange, millions of people are at risk of losing a lot of money because they could not withdraw their coins.
The regulation should provide a transparent legal framework for digital assets, according to the analysts. One that stimulates innovation, protects consumers and investors and removes risks to financial stability.’
The investment bank emphasizes that the top 100 cryptos have already fallen by an average of 64% since the beginning of this year. Yet they are still worth 2175% more than in 2016. If you ignore digital assets, you pay a high price, according to the American bank.
Bitcoin regulation can also be good
There have been plenty of examples of bad regulation over the past few months and even during the bull market. In some countries, investing in cryptocurrencies is completely prohibited, such as in many African countries.
But even the United States is known for being very unclear about what crypto companies and investors are and are not allowed to do. There was even speculation for a while about a blanket bitcoin ban in the US. In Europe, almost a complete ban on crypto mining has even been adopted. Fortunately, the situation in the European Union is already slightly better because the MiCA bill has been approved.
