There are simply two very plausible scenarios that could happen in the crypto market. You either lose some money from it because it’s a bubble or you lose the opportunity to get rich. For a lot of people who entered the crypto market too late, it isn’t actually looking good since Bitcoin has already lost half of its value during its all-time high in December. Do you HODL or minimize the losses?
If you will ask former Commodity Futures Trading Commission chairman Jim Newsome, he believes that cryptocurrencies are far from the bubble speculated by many. And he cautioned US regulators that they should be more careful when it comes to handling the cryptocurrency market. His fear is that the US could get behind by the rest of the world.
Newsome has now fully transitioned into becoming an adviser for cryptocurrency developers, exchanges, and even for miners. He made his comment during the annual meeting of the Digital Chamber of Commerce. He was together with the former SEC commissioner Paul Atkins when he made this statement. Both Atkins and Newsome were supposed to give a report that can help provide an idea on the best practices for cryptocurrency purchases and issuers. Unfortunately, the project was delayed for another two more weeks given the complicated nature of the report.
Strict Regulatory Atmosphere Can Do More Harm
Newsome dismissed speculations that the crypto market is a bubble. He pointed out that the industry is still too small and too immature. One of the reasons is that institutional investors are still waiting in the sidelines waiting for whatever regulatory atmosphere might come about.
He criticized the current SEC chairman Jay Clayton’s stance regarding the cryptocurrency industry. He mentioned that “probably because he is getting word from the White House and Treasury Department”.
Stricter Measures Against Exchanges
SEC released a statement recently that they cryptocurrency exchanges need to be registered. According to the SEC, “many platforms refer to themselves as ‘exchanges’, which can give the misimpression to investors that they are regulated or meet the regulatory standards of a national securities exchange.”
The SEC has looked into cryptocurrencies and has considered them as securities that need tighter regulations. On the other hand, CFTC considers the digital currencies as a commodity.
The US isn’t the only country that has been enforcing strict regulations on cryptocurrencies. In fact, South Korea and China were other Asian countries that have imposed their rules regarding cryptocurrencies. And because of regulations, it has changed the landscape of cryptotrading. In fact, it has reduced the anonymity of those who are trading cryptocurrencies which affected its value. In addition to this, there were the hacks that have affected different cryptocurrency exchanges worldwide.
Was former CFTC chairman Jim Newsome correct after all when he said that the US should be taking a closer look at how they handle cryptocurrencies? Is he actually correct that the crypto market is far from a bubble. Depending on who you listen to, you will most likely get a different opinion. However, given the volatility of cryptos, it is actually hard to tell whether it is a bearish or a bullish future.
