Crypto Market Overview: Tighter Regulation vs. Investors' Mania

​Cryptocurrencies satisfy almost all the conditions to define an investment mania, and 2021 is a major push as retail investors across the globe have tried trading cryptocurrency in some form or the other due to extreme volatility and skyrocketed price. ​ 

In May, New York-based investment bank Goldman Sachs has officially set up a cryptocurrency trading team. According to the memo written by Goldman partner Rajesh Venkataramani, the crypto trading team will be a part of Global Currencies and Emerging Markets led by Mathew McDermott. 

Similarly, Citi is weighing up the launch of crypto services to respond to the rising interest of clients. The banking giant is considering to provide cryptocurrency trading, custody, and financing services. 

Meanwhile, both crypto exchanges and forex brokers are increasingly expanding their crypto services to respective clients. 

For example, CoinFlip, a US-based leading Bitcoin ATM provider, announced that it is now officially expanding its business to Alaska, the "Last Frontier", as three Bitcoin ATMs are already deployed. According to the announcement, four more ATMs will be installed in the state before the end of this summer.

Juno Markets, an award-winning, multi asset online trading provider, has partnered with GC Exchange (GCEX) for rolling out cryptocurrency contracts for differences (CFDs) to expand the range of its suite of offerings. According to Juno Markets, trading services with three crypto-fiat pairs including BTCUSD, ETHUSD and XRPUSD will initially be offered.

Swissquote has introduced Dogecoin to continue expanding its cryptocurrency offering. The latest addition varies the number of cryptocurrencies available to trade via Swissquote to 22. 

CAPEX.com, global multi-licensed broker, has added 12 new cryptocurrencies to its growing crypto portfolio. The new cryptocurrencies include AAVE, Cardano, Chainlink, Compound, EOS, Monero, NEO, Polkadot, Stellar, Tezos, TRON and yearn.finance.

The FCA recently released its fourth consumer research themed on cryptoassets ownership. The research shows that around 2.3 million adults now hold cryptoassets, up from 1.9 million in 2020. 

Furthermore, Voyager Digital, a crypto asset broker that provides retail and institutional investors with a turnkey solution to trade crypto assets, has made a survey with the results showing 87% of respondents in the survey plan to buy more digital currencies in upcoming months.

In contrast to crypto mania, many countries are trying to tighten crypto-related regulations, claiming cryptocurrencies can never replace fiat currency. 

The United States

The US Securities and Exchange Commission (SEC) is looking forward to establishing cooperation with the lawmakers from Congress and other regulatory bodies to work on ways to protect crypto investors. Recently, the SEC and the Commodity Futures Trading Commission (CFTC) issued a warning targeting investors who are looking for funds with exposure to Bitcoin futures. Additionally, these two regulators urged investors interested in Bitcoin-exposed funds to carefully consider the involved risks and benefits. Up to now, there is no comprehensive regulation to govern crypto activities.

The United Kingdom

All the businesses engaged in crypto-asset related activities in the UK have to register with the UK's Financial Conduct Authority (FCA). The FCA has obliged crypto firms to share annual financial crime information with the authority. 

India

The Reserve Bank of India is taking a different approach to curb the growing cryptocurrency industry in the country. According to Reuters, the central bank is informally asking regulated banks to cut ties with crypto exchanges. The Indian government is reviewing parts of the previously drafted legislation to put a leash on the country's booming cryptocurrency industry.

China

China is now extending its anti-crypto stance to the mining industry as one of the Chinese government officials called for a crackdown on cryptocurrency mining. Subsequently, many forex trading related apps have been removed from the China App Store because they are founded to violate the Notice on Severe Investigation and Handling of llgal Foreign Exchange Futures and Foreign Exchange Margin Trading Activities jointly issued by CSRC, SAFE, SAIC and MPS, Zhengjianfa [1994] No.165. Crypto exchange Huobi then suspended its miner hosting services in mainland China. 

​Recently, the People's Bank of China (PBOC), China's central bank, has discussed the issue of the recent speculative activities around crypto trading​ with financial institutions and payment providers like the Industrial and Commercial Bank of China, Agricultural Bank of China, Construction Bank, Postal Savings Bank, Industrial Bank, and the Alipay (China) Network.

Another breaking news is that on June 20, all digital currency mines in Sichuan Province were collectively cut off, and Bitcoin miners who were unable to transfer suffered huge losses. Sichuan is reportedly the largest gathering place for bitcoin miners in China and the world, with a load of about 8 million being used for cryptocurrency mining.

Where should cryptocurrencies should be going in the future? Only time will tell.