The latest MoffettNathanson funding policy, which includes provisions on regulation of crypto assets, could help legitimize cryptocurrencies within the mainstream financial community, says Lisa Ellis.
What's been holding crypto ETFs up is that the SEC has very stringent requirements for things like liquidity, transparency, price stability said Ellis.
There is very well-established rule when it comes to investing, she said. It's just that it's been sort of the 'wild, wild west' and so consumers should be aware that if they have not already started to make sure that they're getting the right reports from their broker, their crypto broker, and reporting it on their tax returns they can start doing that or they'll potentially be subject to an audit going forward.
Although the new rules could cause a drop-off of crypto activity initially, Ellis told Yahoo Finance : 'Over the long term we view this as absolutely a positive.
'More crypto clarity around cryptocurrency regulation helps expand mainstream crypto investing and legitimize crypto investing, helping open crypto investing to a much wider variety of mainstream investors, she added.
The recognition of crypto in such a significant piece of legislation would set precedent for greater regulation of the legislative environment surrounding crypto technology in the US.
'Lawmakers are well-versed enough to think of this and putting it in the infrastructure bill is certainly a very different place than we were in even three to four years ago in terms of the mainstreaming and legitimizing crypto, Ellis said.
With greater transparency and clarity in the legal and regulatory environment, Ellis added that the private sector is likely to incorporate crypto in a variety of ways in the near future. Some new-age institutions have chosen to purchase large amounts of crypto to hold as an asset whereas public-owned companies like Robinhood have started allowing users to trade bitcoin or other cryptocurrencies on their platforms. Experts noted that cryptocurrencies and crypto technology represent one of the fastest-growing areas of the economy even now.
In 2021 mainstream adoption of crypto technology has occurred within mainstream banks and corporations. Tesla began accepting Bitcoin as payment and simultaneously made a large investment in the currency back in February. Elon Musk has since stopped accepting bitcoin, although recent reports suggest that the company may resume the practice sometime in the future once environmental sustainability issues have been addressed.
Other corporates, such as Square and Microstrategic have also have large crypto balances in recent years.
'We will probably then see a much larger array of corporations having to include crypto assets as one of the investment asset classes they use, Ellis said.
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