Looking to invest in Bitcoin? Well, you are not alone. A recent survey shows that 90% of institutional investors in the United States and the United Kingdom want to buy Bitcoin. This is mainly due to the existing and upcoming regulations.
Last July, Pureprofile, a market research firm conducted a survey. The firm noted that a significant number of investors are willing to channel their assets into the crypto market. The survey involved pension funds, sovereign wealth funds, family offices, insurers, and other institutions. Of those who took part in the survey, 26% were inclined to increase their investments into cryptocurrencies. Another 67% believe their crypto investments could increase slightly in the coming days.
In a recent survey, 84% of the investors responded that they expect the crypto market’s regulatory infrastructure to improve. From this group, 805 expect the crypto market to continue growing and could offer greater liquidity.
Commenting on the results, J. Gdanski, CEO and founder of Evertas, said:
“Our research shows that institutional investors are enthusiastic about increasing their exposure to cryptocurrencies and crypto-assets in general, but there are many issues regarding the infrastructure that supports these markets that still concerns them. These need to be addressed if the full potential of investment from institutional investors in crypto assets is to be realized.”
While many consider investing in Bitcoin and other cryptocurrencies, there are still a few concerns that investors need to address. 56% of the surveyed investors were “very concerned” about the lack of insurance policies to support crypto assets investments.
Raymond Zenkich, the president and COO of Evertas, a crypto-insurance company, explained:
“A lack of adequate insurance for the crypto assets market is clearly top of the list of concerns for many institutional investors. This is not surprising since insurers are only providing a capacity of around $2 billion for a market that is worth between $250 billion and $300 million,”
Another 54% of these investors were “very concerned” about companies’ working practices. This includes compliance procedures and institutions providing crypto services.
London, Hong Kong, Singapore, and Japan, have all begun regulating crypto with defined policies. More clarity in regulation across the globe has led to a significant surge in institutional crypto investors.
Crypto Regulations across the globe
The US Securities and Exchange Commission has been adamant in its fight against crypto-related crimes. The Commission has created strict Anti-money laundering regulations and dismissing the Bitcoin ETFs application. But the Commission has recently shown support for the use of cryptocurrencies as real-world assets. FinCEN’s definition of stable coin as money transmitters has also cleared various usability concerns among investors.
Earlier this month, Bank regulators in 49 U.S states announced their intentions to make compliance for cryptocurrency companies simpler by consolidating supervisory exams. The regulators plan to introduce the same rules and standards across the 48 states. The action is meant to help state-licensed money transmitter like Coinbase to work across multiple states.
In 2019, the Chinese president, Xi Jinping, made the headlines after emphasized the need to seize opportunities within the blockchain market. The following day, the parliament in China approved a cryptography law that was designed for “regulating the utilization and management of cryptography, facilitating the development of the cryptography business and ensuring the security of cyberspace and information,” as reported by the Constitution and Law Committee of the National People’s Congress.
By December, there were reports that the Peoples Bank of China was planning to implement and test a central bank digital currency.
In the United Kingdom, the Financial Conduct Authority published its final “Guidance on Cryptoassets” paper in 2019. Months later, in 2020, the FCA announced that existing all businesses carrying out crypto-related activity in the U.K. must register their operations. The authority added that any new crypto businesses established after that date would not operate unless they have successfully registered. The EU has also made amendments to the Anti-money laundering Directive (AMLD) to include a new definition of virtual currencies. The amended directives also include the inclusion of virtual currency providers and custodian wallet providers as obliged entities and the requirement that exchange platforms and custodian wallet providers be registered.
In Germany, the Federal Financial Supervisory Authority (BaFin) published guidelines on March 30, 2020, to help companies apply for authorization to offer crypto custody services.
Lastly, in Japan, following the Mt. Gox scandal of 2014, the Japanese government started developing regulations for the cryptocurrency market. By 2027, the government has amended the Payment Services Act to provide a legal definition of cryptocurrencies. The act also had provisions for the imposition of statutory obligations for all crypto exchange businesses.