22 september 2022 | Regulation

Regulatory clarity for crypto will be driving force for next bull run

According to a former head of risk at Credit Suisse CK Zheng, the next bull market in crypto will be triggered by the regulatory clarity for crypto in the United States. The crypto growth is expected to be seen in early 2023. 

The U.S. government is currently taking some regulatory measures, which may soon drive the integration of cryptocurrencies into traditional finance. He suggested that in an interview with Cointelegraph. 

Zheng is also the co-founder of ZX Squared Capital, a crypto hedge fund that aims at serving family offices and high-net-worth clients. 

As reported by him, recently, the attitudes of traditional institutions toward cryptocurrency appear to have changed dramatically. Many of them found themselves immersed in the crypto world for the first time. 

In August, BlackRock, one of the world's largest asset management firms, announced that it had partnered up with crypto exchange Coinbase. As a part of the agreement, BlackRock offered its institutional clients direct exposure to bitcoin (BTC) and other cryptocurrencies through Coinbase Prime. 

Recently, several major financial institutions decided to team up to launch a digital asset exchange that would be designed for institutional and retail investors. The exchange is available due to the forces of financial giants such as Charles Schwab, Citadel Securities and Fidelity Digital Assets. 

According to the hedge fund manager’s remarks, many more traditional financial institutions are making a concerted push into the cryptoworld now. 

He also emphasized that many citizens were waiting for regulatory clarity for crypto in the U.S. This would allow traditional financial institutions and investors to enter the cryptocurrency market, which would result in the next bull market.

Zheng noted that the Executive Order from U.S. president Joe Biden, which had come into force earlier this year, was an important signal to traditional investors.  However, he admitted that the “devil is in the details" when it came to such questions, as how cryptocurrency trading regulation would be carried out and whether it would be referred to as a commodity or a security. According to him, as long as the regulatory clarity for crypto is provided, institutional investors are aware of the problems they may face.

Cheng expects regulatory measures to be "fleshed out" early next year. 

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