Professional Investors Support Cryptocurrency Regulation

As it pertains to many old guard industries, executives and investors alike shudder at the thought of increased regulations. When it comes to cryptocurrency, however, some market participants, including professionals, view more regulation as a good thing.

In recent years, some market observers viewed the cryptocurrency market as the “Wild West” — a feeling that was unfortunately fortified by the 2022 demise of FTX. Said another way, a dose of enhanced regulation could do cryptocurrency some good and have long-term benefits for exchange traded funds such as the Invesco Alerian Galaxy Crypto Economy ETF (SATO) and the Invesco Alerian Galaxy Blockchain Users and Decentralized Commerce ETF (BLKC).

Data indicate that professional investors, particularly those in the U.S. and the U.K., are receptive to the idea of more regulations in the digital currency realm. A recent survey by London-based Nickel Digital Asset Management indicated that 92% of institutional investors support the “regulation by enforcement” approach employed by the Securities and Exchange Commission (SEC).

Another 90% believe the regulatory action taken by the Commission toward firms such as Binance and Coinbase (NASDAQ: COIN), a BLKC holding, will pay long-term dividends.

With Crypto, Regulations Could Help

The Nickel Digital survey queried professional money managers with a combined $3.5 trillion assets under management in the U.S., the U.K., Germany, Switzerland, Singapore, Brazil, and the United Arab Emirates.

In what could be a longer-ranging boon for assets such as BLKC and SATO and the broader crypto market, 41% of those pros believe the U.S. is showing signs of being “very committed” to robust crypto regulations, while another 55% believe the U.S. is “quite committed” to that cause.

“They believe the US will lead the way in developing robust regulation for the sector, with 53% selecting the country as the jurisdiction with the best approach narrowly ahead of 52% picking the UK and 49% the European Union. Around 26% selected Asia while 21% believe the Middle East will lead the way in crypto regulation,” according to Nickel Digital.

That’s relevant to BLKC and SATO because the ETFs are homes to primarily domestic stocks. So is the point that professional investors view the U.S. and the U.K. as the jurisdictions most committed to advancing and developing crypto markets.

“Institutional investors and wealth managers believe the UK and the US are the most committed to developing the digital asset markets with the ambition of becoming leading global centres for the sector. Around 54% questioned selected the UK while 50% picked the US among their top three countries,” concluded Nickel Digital.

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