Amid a prolonged collapse in asset prices, the digital assets space had a wild 2022 and the problems may force regulators’ hands on crypto in 2023. That’s potentially good news for clients of advisors interested in cryptocurrency investment, since more regulatory clarity will likely lead to more institutional participation in the space.
Several of the notable developments last year will help set the course for this year – not only the failures of FTX and Three Arrows Capital, but also the ongoing work to create a regulatory framework for digital assets in the financial industry undertaken by government agencies.
With some of the more spectacular crashes in the digital assets space in 2022, combined with the growing links between cryptocurrencies and the traditional financial system, 2023 is a year in which regulators will need to play a more central role.
“A crypto regulatory framework needs to be further established and clarified for a new crypto bull market to come,” said Zheng, CEO of ZX Squared, a crypto hedge fund. “It is absolutely imperative to have regulatory audits and transparencies to ensure that stablecoins are fully collateralized and centralized exchanges (CEX) are well capitalized to avoid the repeats of the [Terra] and FTX failures.”
Nigel Green, the CEO of one of the world’s largest wealth management firms, deVere Group, struck a similar tone.
This week, at the World Economic Forum in Davos, Switzerland, he urged world leaders and influencers to address the issue of cryptocurrency regulations.
“The time for endless platitudes on greater regulatory scrutiny is over. Action is required,” he said in a statement. “Should those in attendance at the WEF not advance the agenda of crypto regulation as a result of the 2023 summit, they will have spectacularly failed.”
Green offered three reasons the globe’s leaders need to get serious about crypto regulation, including crypto’s growing role in the financial system, the need for greater scrutiny to protect investors and the importance of boosting economies in emerging countries.
That said, he emphasized that any regulatory framework must balance protecting investors and the financial system with the decentralized nature of digital assets and the need for freedom to innovate.
What Is Crypto On-Chain Analysis and How Do You Use it?
(Erik Isakson/Getty Images)
The vast majority of cryptocurrencies available on the market today use public blockchains to verify and record data. Because of this, the data is available “on-chain” for everyone to see, at any time and from anywhere in the world.
On-chain analysis refers to the method of using information from a blockchain ledger to determine market sentiment. More specifically, it involves looking at transaction data and crypto wallet balances – two things that are useful when trying to decide whether to make an investment or not. After all, if a token isn’t being traded by anyone and a vast majority of its circulating supply is controlled by a handful of large holders, known as whales, then it’s probably not a good idea to invest in it.
Innumerable platforms and sources have sprung up that each offer insightful charts and dashboards to better help users visualize blockchain data and track the movements of crypto and individual wallets.
Many of these on-chain analytics platforms are either free or at least offer plenty of free features. Some of the popular ones include:
The department held a press conference at noon Eastern time on Wednesday.
Disclaimer: The information contained in this newsletter, and any information linked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. You should seek additional information regarding the merits and risks of investing in any cryptocurrency or digital assets.
