Professional investors intend to invest in crypto despite strict regulation – Study

Investors in the crypto industry have long been wary of government attempts to discourage people from committing their funds to the sector. Various public authorities around the world have warned their citizens several times about the alleged dangers of putting their money in crypto. Apparently, digital assets are insecure and highly unstable and people should be careful with them.

However, it seems these warnings are falling on deaf ears. More and more smart investors are entering the crypto spaces and putting in a lot of funds. This is especially the case in the US where the SEC (Securities and Exchange Commission) has gone after crypto entities with total abandon. Professional investors have chosen to ignore the efforts of the regulatory body to stifle the growth of the industry.

65% of retail investors are interested in crypto

According to a 2021 report released by Bloomberg, over 65% of retail investors are in favor of crypto investments. The report is taken from a survey involving 564 respondents from all over the country.

A separate survey by Bloomberg determined that around 56% of investors are still willing to commit their funds to crypto investments, even with increased crackdowns from the SEC. Some 44% said they would choose to stay away from the sector due to increased government legal action against the industry. Basically, this shows that there are more people who are brave enough to enter the industry than there are who want to wait for it to be fully regulated.

The SEC has stepped up its actions

True to the facts, the US SEC has intensified its ongoing crackdown on various crypto-related entities of late. Two of them are Three Arrows Capital (3AC) and Celsius. The authorities want to determine exactly what led to the collapse of the lending and securities companies. On the NFT front, authorities are currently investigating Yuga Labs, the firm responsible for the popular NFTs called Bored Apes, over suspected violations of some security rules. The SEC has already been embroiled in a messy courtroom battle with Ripple, the creator of XRP.

On the positive side, the interventions are an attempt to weed out bad actors from the industry and create a safe environment for investment as well as prevent fraud and money laundering. On the negative side, the shares instill a certain level of fear among investors who see investments in the area as uncertain since the authorities can cause targeted investment vehicles to go out of business at any time.

There is a need for clear regulatory guidelines

Admittedly, everyone in the crypto space is of the opinion that the industry desperately needs proper regulatory guidelines to help it grow. Various top government officials have echoed this sentiment, although not much has been done to realize this goal since crypto became popular years ago.

However, this may now change as the US President himself seems interested in making some changes in the sector. Back in March, President Joe Biden intended to sign an executive order directing relevant authorities to begin researching and formulating effective regulatory frameworks for the crypto industry.

SEC accused of sabotaging the crypto industry

For years, many investors and other industry players have complained that the lack of proper legal guidelines to govern the space was a major obstacle to the growth of the sector. Many have demanded that the SEC rise to the occasion and regulate the industry. However, the SEC has largely avoided this said duty, often issuing vague statements with many gray areas about the industry.

Also, the apparent actions by the body to target some crypto entities like Ripple has set it against many industry enthusiasts who see the actions as an attempt to sabotage the industry.