A turning point for Bitcoin? Where does cryptocurrency go from here?

It has been a busy year for the cryptocurrency business. After reaching a high of over $68,000 in November 2021, bitcoin began to rally around $20,000.

But for long-term ETF investors, some experts advise taking the cryptocurrency’s decline in stride.

“If you’re going to do it right, what’s happened in the last nine months is completely irrelevant,” Ric Edelman, founder of Edelman Financial Services, told Bob Pisani on CNBC’s “ETF Edge” on Monday.

“If you’re investing for the next five to 10 years, it’s just a normal blip in the market and you ignore it,” he said.

But with bitcoin down to near two-year lows, short-term sentiment is met with a mix of positive and negative factors that dictate where the crypto community goes from here.

“This is a really dynamic moment in the market,” Matt Hougan, CIO of Bitwise Asset Management, told Pisani on Monday.

Hougan said the massive technical improvement in ethereum is a constructive force for the future of the world’s second largest blockchain. A wave of institutional investors entering the market and an influx of venture capital activity are also promising indicators for the future of cryptocurrency.

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On the flipside, regulatory pressure from the Federal Reserve and the Securities and Exchange Commission works against it.

“It creates this volatile market where cryptocurrency goes up and down and you can’t quite figure out which way it’s going to go,” Hougan said. “And I think we’ll be stuck there until at least September.”

Edelman explained that regulatory and legislative rules need to be in place for institutional investors to engage with Wall Street firms and endowments and pension funds.

“The adults in the room understand that regulation is a good thing,” Edelman said. “Right now, we have 1% of people doing crypto. Until they clarify what the rules of the road are, you’re not going to get the other 99%.

“We’re seeing new regulations coming from the Treasury, the IRS, FINRA and the Fed,” he said. “And from the SEC and the CFTC. There are over 50 bills in Congress right now. It’s all very healthy.”

SEC Chairman Gary Gensler said the agency should have a bigger enforcement role in cryptocurrency, especially tokens. In a speech this month, Gensler issued a warning signal to organizations it believes are violating existing securities laws, asking employees to “fine-tune compliance for crypto-security tokens and intermediaries” as likely.

“I think there was a pretty direct threat to cryptocurrency trading venues — large-scale institutions like Coinbase,” Hougan said. “They’re clearly on his horizon.”

In July, the crypto firm’s shares fell after it was announced that the platform was facing an SEC investigation into whether it offered unregistered securities.

“I’m happy to say it again and again: we are confident that our rigorous due diligence process — a process that the SEC is already reviewing — keeps securities off our platform,” said Paul Grewal, Coinbase’s chief legal officer. on Twitter.

Proposals for more SEC oversight of the cryptocurrency community are likely to be met with hostility from within the community itself, though the agency has already taken steps to implement its regulatory agenda.

In February, the SEC charged BlockFi Lending with failing to register the offer and sale of a retail crypto loan product. The firm agreed to settle the charges by paying a $50 million fine and ceasing unregistered offerings and sales of the loan product.

“In a year, large trading venues will be registered with the SEC,” Hougan said. “I think individual symptoms, it’s a longer period of time.”

While speculative assets have a tough road ahead, Edelman said the number of people holding cryptocurrencies remains a steadily growing number.

“The interesting thing is that despite this [Coinbase is] “It’s down 70% from the peak, and the number of people who have it is unchanged.” This means that those who want it are not worried about it.

Beyond the crypto community, adoption rates from major investment firms indicate that digital currencies are being embraced by Wall Street, Hugan said.

“The arrival of Blackrock and Schwab reinforces to the everyday investor that bitcoin is not going away,” Hougan said. “I think that’s already settled. How big the future is now.”

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