HOW LACK OF REGULATION AND OTHER FACTORS ARE SLOWING THE GROWTH OF THE CRYPTO INDUSTRY
The greatest problem of the crypto market is interestingly its biggest investment benefit: It is a new emerging industry, and evidently, how it can be regulated has not yet been figured out. This is the exact reason why many experts have argued that it is not too late to invest in a remarkable market. The fact that exchanges are not yet standardized and do not give sufficient security and liquidity is the reason why many prospective investors are reluctant to invest in cryptocurrency. The truth is that cryptocurrencies are genuine and worth investing in, just like every other asset you can think of. Nonetheless, there are still a number of things that need to be done for the industry to grow as deserved. “Should cryptocurrency be regulated or not?” — This is a challenging question to both the Securities and Exchange Commission (SEC) and Congress.
It is not news that shady cryptocurrency transactions and cryptocurrency fraud keep making headlines. This has negative effects on the cryptocurrency industry as a whole, for its pokes a hole in the perceived legitimacy of cryptocurrency. The volatility of the prices of cryptocurrencies also has a correlation with these abysmal headlines. Presently, the biggest players of the industry are in an attempt to coerce regulators to repair the reputation of the industry. Nasdaq hosted a closed-door meeting sometime in July with representatives from crypto markets and traditional exchanges, which happened in Chicago. This meeting transpired in a bid to inspire the legitimization of digital currencies. Also in September, leaders of the industry moved the discussion to Capitol Hill for a meeting that demanded answers to unsolved problems with regard to regulation. As patience is dashed waiting for the clarification of existing laws by SEC, they are now depending on Congress for the definition of the blurred lines.
NEW PLAYERS ARE ENTERING
As big players are gradually taking a keen eye on the cryptocurrency market, the industry is gradually developing. It is quite evident that before cryptocurrencies can be widely accepted by world biggest financial players, there must be outright and proper regulation all over the world.
At the stage that the market is, there is still a debate in many jurisdictions about the classification of cryptocurrencies: Should they be classified as securities or commodities? This debate needs to be concluded for it will be a determinant on how cryptocurrencies are regulated under current laws. While regulation of cryptocurrency has in part started in some countries, others have made zero moves towards it. Regulation of cryptocurrency will have to cover exchanges, trading, and mining for it to be outright and proper. Quite clearly, there has been no new crypto market huge surge because of regulatory uncertainty. No doubt, the SEC has started playing its part in the regulation of cryptocurrencies, but till this moment, the process has been slow.
OTHER FACTOR AFFECTING THE GROWTH OF THE CRYPTO INDUSTRY — INSUFFICIENT INFRASTRUCTURE
The necessary infrastructures needed for the expeditious growth of the crypto industry is still limited. Equipment needed for blockchain applications and cryptocurrency mining is still not widely available. Some have learned a lot about cryptocurrency and are interested in investing in it, but still, the insufficiency of infrastructure has been a drawback. Having sufficient cryptocurrency infrastructure would have had a positive effect on the level of awareness and acceptance of the industry, which would have convinced many more to invest in the industry.
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