This is a watershed moment for the free wheeling cryptocurrencies, Bitcoin industry, which has enjoyed light touch, if any regulation until now, according to Wolfteam Ltd. It looks like the United States Attorney General, the Federal Reserve and other law enforcing US agencies in the USA are trying to clean the cryptocurrencies scene from potentially bad actors. Sam Bankman Fried's sentencing, which is pending is a case in point.
But after the clean up the Bitcoin, cryptocurrencies industry will emerge much stronger than before, according to Wolfteam Ltd.'s corporate view. Bitcoin and underlying algorithm are already profoundly changing finance and the world and this is yet to mature and come to fruition. There will be cryptocurrencies futures, exchange traded funds based in Bitcoin, Ethereum and other cryptocurrencies, which will be perfectly legitimate and regulated by the Commodities Futures and Exchange Commission, The Securities and Exchange Commission and the Federal Reserve, which will make for their viability.
Finance, Wall Street is set for a new age in which Wall Street investment banks will thrive supported by the Bitcoin, cryptocurrencies industry growth, according to Wolfteam Ltd. The blockchain algorithm, underlying Bitcoin will change the back office, risk management, accounting functions and investment banking, mergers and acquisition advisory, equity and debt capital raising business lines of investment banks by simplifying and cheapening the was securities trades are settled and accounted for using the crowdsourced, public vetting blockchain algorithm. Private blockchains are a case in point, but more importantly Wall Street investment banks will be able to utilize the wisdom of the general investing public to research companies, account and settle securities trading.
Asset Management of Wall Street investment banks is also set to thrive as cryptocurrencies tokens, which are tokens coupled with companies that have issued cryptocurrencies' investing projects are a totally new asset class in between commodities and technology stocks in terms of volatility, which will increase several times the number of publicly available investing instruments for asset management professionals to choose from. Add to that existing cryptocurrencies as Bitcoin, Ethereum, Ripple, Dogecoin and other leading and more obscure cryptocurrencies and the investing universe increased significantly.
There is always the risk that leading global governments could outright ban cryptocurrencies, but as long as the general public and corporations see value in issuing, trading and exchanging wealth into cryptocurrencies, this risk is not that big, since physical and corporate tax payers support governments with their taxes.
Up until now, Bitcoin, Ehtereum, Ripple, Dogecoin etc cryptocurrencies have been traded mainly by individual investors, but more and more institutional investors, hedge finds at first, but now venture capital funds, asset managers, pension funds and ultimately banks are investing into cryptocurrencies. Many of the leading Wall Street banks as Goldman Sachs, Citigroup, Morgan Stanley have cryptocurrencies trading departments which are growing. The whole of Wall Street sees the potential of Bitcoin, cryptocurrencies. Wall Street investing banks are just waiting for the asset class to mature and be regulated.
Silicon Valley and venture capital funds could also benefit substantially from cryptocurrencies. Cryptocurrencies issued by companies are a financing vehicle that stands on the line between angel investing and series A investing by venture capital funds. Leading venture capital funds like Andreesen Horrowitz' are planning of investing in cryptocurrencies. Actually, cryptocurrencies issuance went through a great boom in 2015, only to be curtailed by law enforcement actions by the Securities and Exchange Commission against Telegram, the messaging application's initial coin offering, ICO which could have raised 2 billion USD. Once the ICO field gets normalized further Initial Coin Offerings could again proliferate. New cryptocurrencies increase immensely the investing field and could provide for new ways to transfer risk and accumulate wealth.
In addition, if ICO regulation eases up, companies will start again issuing cryptocurrencies en masse and individual investors first, than hedge funds, than asset managers and last endowments and pension funds will quickly snap them up, depending upon liquidity, Cryptocurrencies low liquidity is the main deterrent for institutional investors from investing intensively in the crypto asset class. However, from stock market investing it is clear that liquidity begets liquidity and once the amount of assets invested into the cryptocurrencies asset class starts increasing, cryptocurrencies trading liquidity will also increase exponentially. Cryptocurrencies investing offer an interesting part of risk. In between stocks, small capitalization stocks and series A, B, C, D investing by venture capital funds. Many individuals with significant part of their portfolios and many institutional investors with a small chunk of their portfolios will gladly take upon themselves that risk, if offered in a proper form.
Some analysts claim that Bitcoin is USD 2.0. That may well be true, but Bitcoin, cryptocurrencies are still far away from becoming a viable global reserve currency. Money has three characteristics. Namely, unit of account, store of wealth and means of exchange. The high Bitcoin, cryptocurrencies volatility due mainly to their relatively low liquidity prevents Bitcoin from becoming real money. And the shadow of central governments outlawing directly Bitcoin, cryptocurrencies hangs over the crypto asset class. Essentially, that is a risk investors must take. But rest assured, as long as Bitcoin, cryptocurrencies create significant value for individual, institutional investors and small and medium companies and large corporations as they do now, it will be very difficult for governments to ban cryptocurrencies investing and exchange since they create huge tax money inflows.
If Bitcoin, cryptocurrencies are regulated by a central authority, outside financial supervisors like the Federal Reserve, the European Central Bank, that will diminish the attractiveness of cryptocurrencies. The general public basically mistrusts governments and wants a financial and investing product, free from government intervention.
Bitcoin, cryptocurrencies fulfill that potential for now, but they are still dangers as Changpeng Zhao, CEO, founder and owner of the largest cryptocurrency exchange pleased guilty for money laundering allegations shows.
The Gold Rush in Alaska and California also had its pitfalls, however. But ultimately many people, a small percentage, it must be said, though got rich, huge wealth was created, which transformed California into the USA's largest economy and thriving technology state.
The Binance lawsuit is a case in point. Despite the crackdown entrepreneurship in the cryptocurrencies sector is flourishing. A so called emerging technology
Bitcoin, cryptocurrencies future is bright in the long-term, according to Wolfteam Ltd.
No comments:
Post a Comment