Are Bitcoin ETFs attracting more regulatory attention or not to the crypto industry? To get the answer, there must be many questions that need to be answered.
There are many questions to ponder. Because there is little consensus on what deeper institutional participation means for an industry rife with contradictions. Not just liquidity. But also what are institutions bringing to crypto? And what is it actually worth?
The long-awaited approval of a Bitcoin ETF for pension funds and exposure to BTC may prove to be a positive catalyst for industry growth.
However, because of the focus on price action, observers miss the real benefits of institutional adoption on a wide scale. The greatest benefit of deepening institutional adoption may be the regulatory certainty it brings.
Tax Compliance
Implementing tax compliance is important in crypto regulations in the region. No matter where you live, determining your obligations when buying, selling, and holding digital assets can be a headache.
But it could be worse. Imagine how much more is at stake for businesses whose public accounts are subject to scrutiny and typically require permission to list Bitcoin on their balance sheets.
Traders based in the United States are required to calculate profits and losses on each trade on decentralized exchanges, player positions and on-chain events, other countries take a less strict approach, while some countries do not want to levy taxes at all.
Compliance, transparency, reporting and taxation are more focused on companies. Not on consumers. So it is natural that serious institutional adoption will take a long time to materialize.
As BlackRock starts beating the drum for a Bitcoin ETF, even the US Securities and Exchange Commission (SEC) has to step in and take notice of the gray scale of favorable court decisions against the SEC. August 29 has shown that power institutions can exert efforts to force regulators to renegotiate.
The precedent set in this appeals decision will further increase the agencies’ confidence in their ability to change the law in their favor.
Rules that must be clear
Greater institutional involvement is a good thing. When the largest institutions decide they want to participate, this will force regulators to take action. Not all of the provisions included in the law will help the industry but collectively they provide something that has been missing for years. Namely clarity.
Is Bitcoin a security? What about Ether or Solana? The answer of course depends on who you ask.
Institutions can’t trade assets that are in no man’s land: they need black and white, not gray. Their increasing participation in the market will definitely provide clearer answers in terms of crypto classification, which will benefit the entire industry.
Crypto opponents cannot claim the industry is a hotbed of money laundering and terrorism financing when its most active participants include the world’s leading trading companies.
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Author: Redaksi Media
Cryptocurrency Media