There is concern that regulation could negatively affect the sector by stifling innovation and undermining the decentralised nature of crypto assets - which is one of its key components. Some argue that investors should welcome clearer legislation in order to stabilise an otherwise volatile market, increase security and alleviate some of the fears that have, until now, prevented wider adoption of crypto in the mainstream. Regardless of this lively debate, regulation is imminent and it is essential that investors are prepared.
With a total market value of over $1 trillion and increasing investment from mainstream financial institutions, crypto assets can no longer be ignored by regulators. Although this inspires fear amongst some crypto enthusiasts and investors, effective regulation could help finally bridge the gap with traditional finance markets by reducing speculation, attracting more long-term investors. This could make the markets less vulnerable to outside manipulation, increasing investor confidence and in turn offering greater value over time.
However, fears that regulators don’t fully understand crypto and their laws will reflect this, doing more damage to the sector than good. This panel discussion will take place at a drinks reception organised by the Financial Times, in partnership with Grayscale on the side-lines of WEF Davos. Here they will discuss what the future of crypto regulation looks like, the challenges it will present crypto investors and the potential benefits it could offer the market.