The World Economic Forum (WEF) kicked off Monday and while global elites are slated to discuss a variety of topics, at least one market observer is clamoring for crypto regulations to be part of the conversation.
In a recent note, deVere Group CEO Nigel Green goes so far as to say the WEF confab in Davos, Switzerland will be a failure unless crypto regulations are addressed. Green’s comments come as Bitcoin, the largest digital currency, is off to a scintillating start to 2023, soaring above $21,000 on Monday.
“The leaders assembled in Davos at the WEF must next week return home to their governments who then need to insist that their financial regulators must stop ‘talking the talk’ and begin to up the ante on regulating the cryptocurrency market,” said Green. “The time for endless platitudes on greater regulatory scrutiny is over. Action is required.”
Noting that failure to address crypto regulations would be “spectacular” and not in a good way, Green adds that more oversight of the crypto universe is essential because more high-end investors are entering the arena and because added regulation could go a long way toward easing volatility in the crypto market.
“First, as more and more institutional investors – including pension funds, mutual funds, investment banks, commercial trusts and hedge funds – as well as individual investors, increase their exposure to crypto, and as mass adoption increasingly takes hold, inevitably cryptocurrencies will play an ever-greater role in the international financial system,” added Green.
Following the collapse of crypto broker FTX last year, which had a contagion effect and played a role in sliding digital currency prices in 2022, some investors had their confidence in crypto shaken. More oversight could a long way toward restoring trust.
Restoring that trust is integral for the long-term crypto investment thesis and has near-term implications as well because bitcoin’s price surge to start 2023 could be a sign the “crypto winter” is giving way to a “crypto spring.” That could compel investors to return to crypto or get involved for the first time and added regulations could add confidence.
“The ‘crypto winter’ is thawing amid growing signs that inflation is beginning to cool. Of course, the crypto market will not go in a straight line – no market ever does – but we expect the bears to go into hibernation and bulls are ready to run!” concluded Green.
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