Over the past decade, crypto’s potential as a viable investment asset has greatly expanded. The bleeding-edge innovations combined with the eye-watering performance numbers delivered by leading assets have made the prospect of institutional-caliber investment in the space seem like an inevitability. About 15 years into the crypto experiment, however, institutional participation in crypto remains limited. Instead, many institutions are in a “wait and see” mode, conducting thorough due diligence before taking the plunge into this new investment landscape.
Among the many reasons for delayed allocations, institutions may be deterred by the opacity of the regulatory landscape, insufficiently mature market infrastructure, inadequate investment vehicles, and a lack of suitably long track records for these assets. Fortunately, a wide range of positive developments are emerging which address these concerns, from a shifting regulatory landscape to maturing infrastructure and growing demand. As such, we may be approaching an inflection point when it comes to institutional crypto allocation over the longer term.
This post is part of Consensus Magazine’s Trading Week 2023, presented by CME.
A major reason that the tides are turning is because incremental gains are being made on the regulatory front. For example, bitcoin has been deemed sufficiently decentralized to be considered a commodity rather than a security. This distinction contributes to a clearer regulatory framework for the most prominent crypto-asset and sets a precedent for similarly decentralized digital assets.
Furthermore, recent wins in the courts are establishing powerful precedents that are working to establish rules of the road for the crypto industry. Perhaps most notable among these was the decision handed down by U.S. District Judge Analisa Torres this summer in U.S. vs. Ripple Labs. In her opinion, Judge Torres stated that programmatic sales of XRP tokens to retail investors on public exchange platforms did not meet the criteria of an unregistered offering of securities, providing a framework for how we might think about the treatment of token sales. While challenges and uncertainties persist, these recent developments among many others suggest a positive-trending regulatory environment in the U.S.
Read more: Sol, Memes,…
Click Here to Read the Full Original Article at Cryptocurrencies Feed…
