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The latest congressional infrastructure bill, which includes provisions on the regulation of crypto assets, could help legitimize cryptocurrencies within the mainstream financial community, said Lisa Ellis, partner of MoffettNathanson.
What has held up crypto ETFs is that the SEC has very strict requirements for things like liquidity, transparency, price stability, ”Ellis said.
[There are] very well-established rules for investing in stocks, she said. These same rules apply to crypto. It’s just been kind of the ‘Wild, Wild West’, so consumers should know that if they haven’t already started making sure they’re getting the right reports from their broker, from their crypto broker, and report it on their tax returns, they should start doing so or they may be audited in the future.
While the new rules may initially lead to a drop in crypto activity, Ellis told Yahoo Finance, in the long run, we see this as absolutely positive.
Greater crypto clarity around crypto regulation helps legitimize and integrate crypto investing, opening up crypto investing to a much wider range of traditional investors, she added.
The recognition of crypto in such an important piece of legislation could set a precedent for better defining the legislative environment surrounding crypto technology in the United States.
Lawmakers know enough to think about it and putting it in the infrastructure bill is certainly a very different place than what we were three or four years ago in terms of crypto integration and legitimization. , Ellis said.
With greater clarity and transparency in the legislative and regulatory environment, Ellis added, the private sector is expected to integrate crypto in various ways in the near future. Some public companies have chosen to buy large amounts of crypto to hold as an asset, while new age financial services companies like Robinhood (HOOD) have started to allow users to trade bitcoin (BTC-USD) or d ‘other cryptocurrencies on their platforms. Experts have noted that cryptocurrencies and crypto technology represent one of the fastest growing areas of the economy even today.
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In 2021, wider adoption of crypto technology has occurred among financial institutions and traditional businesses. Tesla (TSLA) began accepting bitcoin as a form of payment and simultaneously made a significant investment in cryptocurrency in February. Elon Musk has since stopped accepting bitcoin, although recent reports suggest the company may resume the practice in the future once environmental sustainability issues are resolved.
Other public companies, such as Square (SQ) and Microstrategy, have also accumulated large crypto balances in recent years.
Well, likely, a much wider range of companies will start to include crypto assets among the investment asset classes they use, Ellis said.
Ihsaan Fanusie is a writer at Yahoo Finance. Follow him on Twitter @IFanusie.
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