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Source: Сointеlеgrаph

The former head of risk at Credit Suisse believes that the next cryptocurrency bull market will be due to “regulatory clarity” in the United States, which he expects to happen in early 2023.

Speaking to , C.K. Cheng, former head of risk assessment at Credit Suisse, said some of the regulatory action being taken in the United States will soon “open the doors” of traditional finance to cryptocurrencies.

Cheng is a former chief executive of investment bank Credit Suisse who stepped down in July 2021 and co-founded ZX Squared Capital, a cryptocurrency hedge fund focused on family offices and high net worth clients.

Cheng said that in recent times, the attitude of traditional institutions towards crypto has changed dramatically, with many of them dipping into the crypto waters for the first time.

In August, BlackRock, one of the world’s largest asset managers, partnered with crypto exchange Coinbase to provide its institutional clients with access to bitcoin (BTC) and cryptocurrencies through Coinbase Prime.

More recently, several large financial companies have teamed up to create a digital asset exchange catering to institutional and retail investors backed by financial giants including Charles Schwab, Citadel Securities and Fidelity Digital Assets.

“You are currently seeing many more traditional financial institutions getting involved in the crypto space. […] You see huge interest,” said the hedge fund manager.

Cheng also stressed that many others are “awaiting further regulatory refinement in the US” before stepping in:

“It will really open the door for traditional financial institutions, you know, attract a lot more institutions, investors into the space. So I would say this is how the next bull market will start.”

He also believes that US President Joe Biden’s executive order earlier this year sent an important message to traditional investors, although he acknowledged that “the devil is in the details” when it comes to how crypto trading will be regulated and whether crypto will be considered a commodity. or securities.

“From an institutional perspective, as long as the regulation is clear, it gives the institutional investor a very clear path to see that they are not tripping over regulation issues. […] it will attract institutional investors to this space,” he added.

Related: ‘Fear of the unknown’ keeps tradfi investors away from crypto – Bloomberg Analyst

Asked when the tipping point would be, Cheng said he expects regulatory clarity to be “detailed” sometime early next year.

“So hopefully something much more concrete will come up by early next year. And that will help, you know, the market in terms of sentiment in terms of people’s perceptions. [of crypto]. I think regulation will help with that.”

Asked how BTC prices will move in the near future, Cheng says he expects October to be a “very volatile” month for BTC.

“October is a rather volatile period of time, especially when combined with high inflation, with a lot of debate in terms of the Fed and policy changes. The concern is that if the Fed tightens too much, the US economy could actually plunge into a serious recession.”

Cheng believes that this uncertainty will cause more volatility in both the stock market and the cryptocurrency market, but will stabilize by next year. At the same time, a few months before the next bitcoin “halving” in 2024, “another bull market” could begin.

Source: Сointеlеgrаph

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