Adrian Lai, one of the founding partners of crypto investment firm Orichal, based in Hong Kong, is confident that 2018 will see a more ‘mature’ crypto market and an increased trading volume.
The influential South China Morning Post published his prediction yesterday. The article revealed that although the cryptocurrency market took a dive after it reached an all-time high of $800 billion in January, Lai sees this as “irrational.” He views the incredible volatility as the result of a lack of regulatory oversight and institutional investment, with the latter caused by the former.
He said: “Regulators are not banning the development of cryptocurrencies, but are trying to better regulate the market, which should help the industry mature (…) If the regulatory stance gets clearer, large funds will be more assured and willing to commit significant capital.”
And it is clear that regulation is coming, albeit in fits and starts as might be expected. But, the current momentum around regulations gives credence to Lai’s view. The SEC and CFTC in the United States have both exerted considerable energy over regulating the cryptocurrency markets and ICOs, and in the Asian markets, Japan and South Korea are also moving the debate about regulation of all aspects of blockchain-related businesses along at speed.
Most of the countries at the forefront of introducing regulations are not quite there yet, and they also have the thorn issue of taxation to work out as well.
It is to be hoped that regulatory frameworks will give the large institutional investors the confidence they need to fully embrace the crypto markets and this should, as many like Adrian Lai believe, boost the market cap, which was $261 billion this week. The SEC is also optimistic about the future of the blockchain, which its says has “incredible promise for the financial industry.” Its spokesperson also pointed out that the reason behind its crackdown was removing fraud from the crypto sphere, not getting rid of the market completely.
Recent surveys show that investors are optimistic. The recent Huobi report showed that it 78% believe cryptocurrencies will rise in next three months, and a survey from Finder Hong Kong revealed that executives from 13 global fintech companies showed optimism in the future growth of cryptocurrencies.