Conflicting Views on Cryptocurrencies May Confuse Retail Investors, Kalkine Media Notes

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TORONTO, 22 November 2021 / PRNewswire / – Extreme price volatility alone is not the most defining aspect of blockchain-based digital currencies, which we generally refer to as cryptocurrencies. One aspect often overlooked by retail investors is the conflicting views of governments, regulators and private players on cryptocurrencies. No country or regulator seems to have an identical view on cryptos.

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Developed countries have a near consensus – Cryptos are risky

Almost all senior officials and politicians vehemently oppose the rise in cryptocurrency investments or remain cautiously silent. Senator Elizabeth warren is a fierce critic of cryptos, and during the Senate hearing titled “Cryptocurrencies: What Are They For,” she spoke about the systemic risk of space on the wider U.S. economy.

President of the SEC Gary Gensler took a balanced approach when speaking about cryptocurrencies at the Aspen Security Forum. Janet Yellen turned into “extremely inefficient and volatile” cryptos just a month after taking office as Secretary of the Treasury.

Contradictory positions in emerging economies

Emerging economies matter more to investors than developed economies. Foreign institutional investors were bullish on China and India to find an alternative to developed economies where growth has slowed.

China became the first major economy to ban cryptocurrencies. People’s Bank of China declared all crypto-related activities “illegal financial activities”. This effectively makes it a criminal offense in China to hold, trade or mine cryptos. Elsewhere, they remain unregulated but not illegal.

Contrary to this, India convened a stakeholder meeting to deliberate on the opportunities and challenges of cryptocurrencies. The Reserve Bank of India banned crypto services offered by banks in 2018, a decision the country’s Supreme Court overturned in 2020. The country’s finance ministry is also exploring ways to bring crypto trading within the scope of the tax. , and a bill in this regard could be presented shortly.

In Indonesia, the country with the largest Muslim population, the main religious council has called cryptos a “haram.” In Brazil – member of the BRICS grouping – a member of Congress proposed a bill to legalize Bitcoin.

Multilateral meeting on cryptocurrencies

The contradictory position of various governments and regulators can confuse crypto investors, especially in the retail space. Any hostile announcement about cryptos by a specific economy is a blow to the prices of crypto assets such as Bitcoin, which takes the lion’s share of the headlines.

This argues for a multilateral meeting of developed and emerging economies to find common ground. Billions of dollars are stuck in crypto assets, and any major upheaval can spill over into the wider financial world.

These contrasting developments in the cryptocurrency investment space can be intimidating for retail investors, who often base their decisions on favorable market winds. Much of the bullish race in the crypto space has been fueled by retail investors in 2020 and 2021. Any widespread negative sentiment within this class could lead to an impulsive and massive outflow, and therefore a sharp correction from the market value of cryptos.

Media contact:
Honey Bhargava
[email protected]

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SOURCE Kalkine Canada Consulting Services Inc.


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