2021 Cryptocurrency & Regulators - Investors & Traders Overview - By Shivkumar
Bitcoin hit a high of $29,000 on Thursday while writing the blog & Other crypto currencies have also seen significant gains this year. Crypto trading has been a virtual gold rush for investors or traders who have flocked in 2020 with a lose or fortune overnight approach and a growing interest towards cryptocurrency after supreme court ruling as an alternative asset investment. That’s all about to change.
More and more regulatory moves from governments around the world, such as USA, Europe, UK, & India leave no doubt that crypto is set for a deep transformation. This will have substantial implications for investors, will be good or worse ?
In these blog we will discuss alternative way for Investors to make money with Cryptocurrencies as diversification asset allocation in your investment portfolio.
How Money is made in Cryptocurency ?
1) Pumping & Dumping :- Know by different name by traders or investors. Buying a token or crypto before it pumps and sell it before the dump in short term. Speculators or traders due to lack of patience, look in for short term profits or quick money.
2) Buy & Hold Strategy : - Buy at the dip or in an uptrend and hold the crypto for long term in triple digit returns for few months or years.
Regulation will Reshape to Vanish Get - Quick - Rich Scheme
Rules for Regulations :
1) KYC requirement for all wallets and exchanges.
2) Register investment token or ICO as securities as per respective country laws.
3) Market making prohibition.
The above rules will eliminate below primary money making :-
1) Registration as securities or token with KYC norms for exchanges rules pushes pump-and-dump coins into a ambiguous area.
2) Regulatory procedure will increase the cost for companies and reduce cost for altcoin investors.
Retail Investors pushing crypto growth & Regulation
Retail investor or individuals adopting crypto as an alternative assest class who have been pushing the volumes in 2020, not just Bitcoin, other cryptocurrencies like Ethereum, Tether and Litecoin also delivered a strong performance.
Young millennials age group of 25 to 40 years when they start their professional life and who understand technology, choose crypto as their first asset class. The blockchain technology enabled the trust and existence of cryptocurrency.
Due to lack of clear regulation institutional participation is yet to gain momentum in the adoption of this asset class.
As some traditional banks are hostile towards crypto, we have more than a few dozen of banks who are accepting its business. These approach have paved way to Crypto Bank in India. (Cashaa, through a joint venture with United Multistate co-op society)
What lies ahead 2021?
1) Greater demand from institutional investors, hedge funds, family offices, and from retail investors.
2) Major uptrend in Bitcoin, Ethereum & altcoins prices in 2021.
3) With Rise of more regulated exchanges will increase volatility and volume for retail and institutional buyers.
4) Fundamental news from media & news have created awareness and education about blockchain technology & Cryptocurrency.
A proper Legislation drafted for cryptocurrency and agencies with cyber savvy cadre to discern these transactions. Despite the lack of regulation, enforcement agencies in India frequently ask for KYC details of customers from cryptocurrency exchanges.
Its a great beginning toward cryptocurrency in 2020 which laid a foundation for further step in the year 2021.
For More Updates stay connected, Stay Safe. God Bless.
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