SEC crackdown on crypto makes industry move attractive to investors

An SEC crackdown on the crypto industry in the US is already having an unexpected effect, with several market players now saying they want to invest in the space, according to a new survey.

Specifically, 60% of survey respondents said they see the recent regulatory efforts against the crypto industry as a positive sign, with some arguing that regulation also brings the clarity that traditional investors need.

Among the regulatory actions taken in the US in recent months is an investigation into bankrupt crypto hedge fund Three Arrows Capital, as well as crypto lender Celsius (CEL), which is currently in bankruptcy protection.

The survey was conducted on 564 respondents by Bloomberg Markets Live, and the results were first reported by Bloomberg earlier this week.

One of the industry players who said he welcomed regulations and increased enforcement was Chris Gaffney, president of global markets at TIAA Bank. According to him, a regulated environment opens the doors for professional investors to enter the crypto space.

“I’m in the ‘yes’ camp. As a professional investor you need a regulated investment opportunity and that opens the doors for more professional investors to get involved in crypto if it is more regulated. The more they can get crypto out of the wild west and into traditional investing, the better it’s going to be,” Gaffney told Bloomberg in a comment.

Meanwhile, survey respondents were also slightly more optimistic about the outlook for bitcoin (BTC) this time than during the last survey in July.

At the time, several respondents believed that bitcoin was more likely to first fall to $10,000 than to rise to $30,000. Now, however, nearly half of respondents said they believe the coin will continue to trade between $17,600 and $25,000 until the end of the year.

When asked about bitcoin’s correlation with other assets, and its recent high correlation with tech stocks, 42% of respondents said they believe the tech stock correlation will remain the same over the next 12 months. At the same time, nearly half of all respondents – or 43% – said they plan to increase their bitcoin exposure over that time period.

Finally, with roughly half of respondents referring to crypto as either a “Ponzi” or “the future,” the space remains a divisive topic, to say the least.

“It’s almost like a religion — if you believe, you’ll always believe no matter the cost or the headwinds,” Victoria Greene of G Squared Private Wealth summarized the findings by telling Bloomberg.