2021 was big. What to expect from 2023?
Bitcoin has hit numerous new all-time highs in the recent year, followed by substantial falls and greater institutional buy-in from major organizations.
Ethereum, the second-largest cryptocurrency, also hit a fresh all-time high late last year. The US government and the Biden administration are both interested in the new bitcoin regulations. In the meantime, interest in crypto has soared: it’s a hot topic not only among investors but also in pop culture, thanks to everyone from long-time investors like Elon Musk to that high school kid on Facebook.
2021 was a “breakthrough” in many ways, according to Dave Abner, head of global development at Gemini, a well-known cryptocurrency exchange.
Regulation of Cryptocurrency
In the near future, you will probably hear more about crypto law. The regulation of stablecoins has aroused the interest of US policymakers.
By implementing regulations and guidelines, lawmakers in Washington, D.C., and throughout the world are attempting to make cryptocurrencies safer for investors and less alluring to hackers.
“Regulation is one of the key overhangs in the crypto market globally,” says Jeffrey Wang, president of the Americas at Amber Group, a Canadian crypto finance provider. “Unambiguous regulation would be immensely appreciated.”
Jerome Powell, Chairman of the Federal Reserve, has declared that he has “no intention” of outlawing cryptocurrency in the United States, while Gary Gensler, SEC Chairman, has highlighted his agency’s and the Commodity Futures Trading Commission’s duties in market regulation on numerous occasions.
If tighter legislation is not enforced, investors will “certainly be hurt,” according to Gensler. Furthermore, the Internal Revenue Service (IRS) has a vested interest in ensuring that investors are aware of how to disclose virtual money on their tax filings. The views made by Gensler and Powell are in line with a growing consensus among the Biden administration and other US legislators that cryptocurrency regulation needs to be strengthened.
Regulation, like so many other aspects of crypto, has its own set of challenges. “Various authorities may or may not have jurisdiction to supervise everything,” Wang explains. “Moreover, it varies by state.”
Because U.S. corporations and investors are now operating without clear standards, proper regulation would remove a “major obstacle for cryptocurrency,” according to Wang.
What New Regulation Could Mean for Investors?
The US president’s $1.2 trillion bipartisan infrastructure bill contained crypto tax reporting rules, which might make it easier for the IRS to track crypto activity among people in America.
As a result, experts advise investors to keep track of any capital gains or losses on their cryptocurrency holdings. The new rules can make it easier for investors to properly declare bitcoin transactions.
“Exchanges will have to provide 1099-B tax forms containing cost basis information to investors,” Shehan Chandrasekera, CPA, head of the tax strategy at CoinTracker.io, recently stated. “By doing so, the time it takes to file crypto tax returns will be significantly reduced.”
Regulatory news may have an impact on the price of cryptocurrencies in already volatile markets.
Due to market volatility, investing professionals advise keeping cryptocurrency investments to less than 5% of your whole portfolio and never investing money you can’t afford to lose.
In the end, a lot of experts agree that regulations are beneficial to the sector. “Everyone benefits from sensible regulation,” argues Ben Weiss, creator, and CEO of CoinFlip, a platform for buying cryptocurrency and crypto ATM networks. “It gives people greater trust in cryptocurrency, but I think we need to take the time and get it right.”
Institutional Cryptocurrency Adoption
In 2021, mainstream businesses across a wide range of industries indicated an interest in cryptocurrencies and blockchain, with some even making investments. AMC, for example, has just stated that it will be ready to accept USDC payments before the end of the year. PayPal and Square are betting on cryptocurrencies by allowing customers to buy them on their websites so they can choose a payment method of their preference.
Tesla is still undecided on whether or not it will accept Bitcoin payments, despite the fact that the company holds billions of dollars in digital currency. This type of buy-in is expected to become more common, according to experts.
“We’ve seen a lot of interest,” Abner says, “and that’s going to fuel the industry’s growth for a long time.”
Some experts predict bigger, global corporations could jumpstart this adoption even more in the latter half of this year. “What we’re looking at is institutions getting involved in crypto, whether it’s Amazon or the big banks,” says Weiss.
A huge retailer like Amazon could “create a chain reaction of others accepting it” and would “add a lot of credibilities.”
Indeed, Amazon has recently sparked rumors that it’s making moves to that end by sharing a job posting for a “digital currency and blockchain product lead.” Walmart is also recruiting a crypto expert to oversee its blockchain strategy.
Conclusion
We can guess (and many wills) what value crypto will have for investors in the coming months and years, but the reality is that it’s still a new and speculative investment with a little history on which you can create predictions. If you feel comfortable with your prediction you can read guide on how to buy usdc at cex.io
