The $ 2.6 trillion market capitalization spike forced regulators around the world to seriously analyze digital currencies, but they also don’t want to stifle a growing industry, said CoinShares strategy director Meltem Demirors.
Stating that “uncertainty is the name of the game for the industry,” Meltem Demirors noted that he has taken over the macro environment in recent weeks. “Gary Gensler, the president of the SEC, has indicated that he wants to take the regulation of encryption exchanges more seriously,” he added, “around the world, we are seeing regulators begin to take note.”
Digital currencies started this year with less than $ 1 trillion of total market capitalization, reaching a high of $ 2.6 trillion a few weeks ago. Demirors said regulators are starting to take the asset class seriously. “We will continue to see the uncertainty of why industry, investors and speculators are waiting alike to see how regulation is set up,” he added.
Speaking about market perception by regulators, Demirors said regulators want to ensure compliance with Know Your Customer and Anti-Money Laundering and ensure market oversight without stifling the growing crypto industry.
Demirors stressed that central bankers ’warnings about digital currency have an impact on sentiment. “Sentiment informs demand and demand informs what is happening in the market,” he explained.
The executive described what we have seen in recent weeks as the biggest deleveraging event. Following the May 19 liquidation, which saw the largest daily wick in the history of Bitcoin (BTC), nearly 60% of total leverage has been removed from the cryptocurrency market, he said. pointed out.
“We see many investors and traders taking a risk reduction approach in which they try to minimize their directional exposure until we see how these regulations are going to be developed.”
Commenting on the actions of digital currency prices, Demirors does not believe that digital currency prices will remain stable for too long, stating: “There is more than $ 3 trillion dry powder on the margin alone in U.S. institutions will be implemented, and I can’t help but believe that some of this will come to this market. ”