The crypto market has come a long way since its inception more than a decade ago. Despite facing numerous challenges and criticisms, the industry has managed to grow and evolve into a multi-billion dollar market. However,the question of whether the crypto industry will survive is a complex one that cannot be answered definitively.
The war in Ukraine and the Covid pandemic have both had an effect on the crypto industry, and the recent news of Paxos being ordered to stop issuing Binance Stablecoin and being met with a lawsuit from the SEC have certainly raised some concerns.
One of the biggest factors contributing to the recent crypto market drop is increased regulation by governments around the world. Cryptocurrencies are largely unregulated and this lack of oversight has led to some fraudulent activities and scams. To combat this, governments have started to impose stricter regulations on cryptocurrencies. These regulations have made it more difficult for investors to enter into the market, which has had a negative effect on prices.
Another factor that has contributed to the recent fall-out of crypto is the rise in transaction fees associated with trading these digital assets. As demand for these coins grows, so do transaction fees associated with buying and selling them. This makes it costlier for investors to enter and exit positions, which can deter potential buyers from participating in the market and cause downward pressure on prices.
The recent fall-out of crypto shows just how volatile this asset class can be and highlights all the potential risks associated with investing in it. Investors should always do their research before entering into any type of investment and be aware of all potential risks before making a decision about whether or not it’s right for them
Mainstream Adoption & Regulation
The truth is that regulation and enforcement of cryptocurrency has been a slow process, and it’s likely to remain so for the foreseeable future. The good news is that many of the world’s governments and regulatory bodies have begun to recognize the potential of crypto assets, and some have even begun to pursue initiatives in the space.
The FTX collapse will stir up regulators to more actions. SEC lawsuit is an example of regulators looking to oversight crypto players. The industry will move towards regulation across the world to protect investors from uncertainties, eliminate security risks and prevent impacts on the global monetary system.
Governments across the world including the US, the UK, and the European Union are largely taking key steps in cleaning up the crypto market to prevent other collapses. Unlike the US and UK, the EU is in an advanced stage and might become the blueprint for global regulations of cryptocurrencies.
In light of those recent events, it seems likely that the crypto industry, and stablecoins in particular, will be subject to more oversight and regulation. To address concerns about the use of cryptocurrencies for
unlawful purposes, policymakers may take more regulatory and enforcement actions in the coming months and years. But it’s important to remember that the crypto industry has had problems with regulations before and has been able to adapt and grow.
In the future, the crypto industry will face enhanced regulatory scrutiny to create a credible crypto market. The SEC and other global regulators are recommending public reporting by the crypto firm to disclose material adverse exposure that might lead to financial distress or potential collapse.
The recent news regarding Paxos and the SEC lawsuit over BUSD is particularly noteworthy. It has left the crypto community baffled and uncertain about the future of stablecoins. However, I believe that this is not necessarily a sign of the crypto industry’s demise.
Adoption In Europe
The EU has been relatively slow in establishing a regulatory framework for crypto-assets. However, the European Commission and European Supervisory Authorities (ESAs) have recently proposed new rules to address the risks associated with crypto-assets.
The proposed measures include:
- A comprehensive set of definitions and classifications for crypto-assets;
- Rules to ensure proper market integrity, investor protection and financial crime prevention;
- Obligations for intermediaries dealing with crypto-assets;
- Regulatory oversight of exchanges trading crypto-assets; and
- Cybersecurity requirements for all entities involved in the sector.
The proposals are intended to provide a harmonized approach across Europe, while also aiming to create an innovative space for business models and technologies related to cryptocurrencies. The new rules will be subject to consultations with stakeholders before being adopted by the European Parliament and Council.
The use of cryptocurrencies like Bitcoin and Ethereum is rapidly growing in Europe, with a number of countries leading the way. This surge in demand for digital currencies has been driven by a variety of factors, including increased user adoption, regulatory clarity and improved infrastructure. As a result, Europe is becoming an increasingly attractive destination for investors looking to enter the crypto space.
One of the main drivers behind Europe’s growth in cryptocurrency adoption is its willingness to embrace new technologies. From Switzerland’s Crypto Valley to Estonia’s e-Residency program, European governments have taken steps to make their jurisdictions some of the most hospitable for blockchain-based businesses and projects. This has helped create an environment where entrepreneurs can easily launch their own ICOs or build companies based on blockchain technology.
Another factor driving crypto adoption in Europe is the increasing availability of financial services tailored specifically to crypto users. For example, a number of banks across the continent now offer debit cards that allow customers to pay with their cryptocurrency holdings instead of traditional fiat currencies like euros or US dollars. Companies such as Revolut and Wirex are also beginning to offer cryptocurrency wallets and other services designed to make it easier for people to store, send and receive digital coins.
At the same time, more exchanges are entering the market, providing greater liquidity and making it easier for traders to find trades that suit them best. Popular platforms such as Binance or Kraken are just some examples of how crypto trading has become more accessible in Europe, allowing users from all over the world to trade their digital assets on these exchanges with relative ease.
Regulators across Europe have begun taking steps towards clarifying how cryptocurrencies should be treated under existing laws and regulations. While some countries such as France have chosen to impose stricter rules on digital asset transactions than others – taxing gains from trading cryptocurrencies at up to 45 percent – there are still plenty of regions where investors can feel safe knowing that they won’t be subjecting themselves to legal risks when dealing with digital coins.
While regulatory challenges will undoubtedly continue, it is important to remember that the industry has weathered similar storms in the past.
As a cryptocurrency OTC in Denmark, we’re seeing a consumer shift away from stablecoins in recent days, largely after the announcement of the SEC lawsuit against Paxos after having received feedback from our VIP customers that we are regularly in contact with.
Thomas Franklin , Bit Investor
These customers are instead choosing to buy and sell regular cryptocurrencies – primarily BTC and ETH.
While the US news have an impact here in Europe, we see regulators in Europe taking different approaches and focusing on CBDCs.
We expect the consumer sentiment to continue flowing into regular cryptocurrencies and less and less towards stablecoins for the security which they may previously have provided as trading balances.
In our business environment, we’re seeing communication from the Danish Financial Supervisory Authorities whom we’re regulated by, a trusted and reliable regulator in the EU, not suggesting lawsuits here taking place against these large Stablecoins in large.
Furthermore, the EU and our regulators seem more hesitant to consider ie staking and the coins connected securities, thus Europe may make for a more stable environment for cryptocurrency investors.
While the crypto industry in the US is facing difficulties, other parts of the world are less impacted and we see a bright future for crypto here and doubt the industry is going bottom up.
Future of Crypto Market
Overall, it’s clear that there is strong momentum behind crypto right now — both from individuals who are interested in taking advantage of its potential advantages and from institutions who see its long-term potential as an asset class. As more people become aware of what crypto can do for them and trust increases among investors, we can expect mainstream adoption of cryptoassets will continue at an accelerated pace over the coming years!
Even though the outlook for the crypto market is bad at the moment, the larger industry is here to stay. We are only in a transition period. The crypto community should learn that regulations will play an instrumental role in the future. The crypto industry must adapt to regulations if it wants to survive.
Cryptocurrency is a relatively new phenomenon, and its future is uncertain. With its huge potential for growth, many investors are wondering if crypto will survive long-term.
The future of crypto market remains uncertain, but with its potential for growth and technological advancements like blockchain, there’s reason to believe that crypto will survive over time. As governments become more open to regulating this new form of currency and businesses continue to adopt it as payment methods, cryptocurrency could become an established part of our economy in the years ahead.
