{"id":2495,"date":"2023-10-01T01:08:34","date_gmt":"2023-10-01T01:08:34","guid":{"rendered":"https:\/\/solanacrypto.news\/2023\/10\/01\/expect-new-crypto-regulations-to-follow-bitcoin-etfs\/"},"modified":"2023-10-01T01:08:34","modified_gmt":"2023-10-01T01:08:34","slug":"expect-new-crypto-regulations-to-follow-bitcoin-etfs","status":"publish","type":"post","link":"https:\/\/solanacrypto.news\/2023\/10\/01\/expect-new-crypto-regulations-to-follow-bitcoin-etfs\/","title":{"rendered":"Expect new crypto regulations to follow Bitcoin ETFs"},"content":{"rendered":"
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Aside from liquidity, what do institutions bring to crypto? What precisely is their value added? This is an instructive question to ponder, because there is little consensus on what deeper institutional participation means for an industry that is riven with contradictions.<\/p>\n

The long-running wait for Bitcoin ETF approval<\/a>, giving pensions and funds exposure to BTC, may well prove to be a positive catalyst for industry growth. But in focusing on price action, observers are missing out on the real benefit of broadscale institutional adoption. The greatest benefit of deepening institutional adoption may be the regulatory certainty it ushers in.<\/p>\n

Tax and Compliance<\/h3>\n

There are a number of areas where institutional involvement is forcing regulators to give straight answers. Chief among these are taxation and compliance. What trades can a business legally make, how should they be disclosed on its balance sheet, and what steps must it take to report these activities?<\/p>\n

Related: <\/em><\/strong>Bitcoin ETFs: A $600B tipping point for crypto<\/em><\/strong><\/a><\/p>\n

Determining what constitutes a taxable event in crypto depends on your dominion. While U.S. traders are required to calculate\u00a0profit and loss (PnL)<\/a>\u00a0on every trade on a decentralized exchange (DEX)<\/a>, perps position, and on-chain event, other countries take a less rigorous approach, while a few don\u2019t bother to tax it at all.<\/p>\n

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#Bitcoin<\/a> ETFs will be Delayed until the Final Deadline<\/p>\n

The SEC is trying to show that they are not interested and attempting to push the dates until the final deadline, even though both the SEC and BlackRock know the inevitable outcome.<\/p>\n

BlackRock’s ETF should be the first one\u2026 pic.twitter.com\/6ZkfUf9WPR<\/a><\/p>\n

\u2014 Mags (@thescalpingpro) September 29, 2023<\/a><\/p><\/blockquote>\n

Regardless of where you reside, determining your obligations when buying, selling, and storing digital assets can be a headache. But it could be worse: imagine how much more is at stake for businesses, whose public accounts must be scrutinized, and which typically require permission to even list Bitcoin (BTC<\/a>) on their balance sheet.<\/p>\n

There are good reasons why a higher bar is set for enterprises in terms of compliance, disclosure, reporting, and taxation compared to consumers. It\u2019s a primary reason why it\u2019s taken so long for serious institutional adoption to manifest. But as the trickle of financial firms gaining a foothold in the space turns into a flow, the retinue of lawyers and lobbyists in tow has begun to yield dividends. When BlackRock starts beating the drum for a Bitcoin ETF<\/a>, even the Securities and Exchange Commission (SEC) has to sit up and take notice.<\/p>\n

Grayscale\u2019s favorable<\/a> court ruling against the SEC on Aug. 29 has shown the power institutions can muster in forcing regulators to renegotiate. The precedent this appeals decision sets will further increase the confidence of institutions in their ability to reframe legislation in their favor.<\/p>\n

Seeking regulatory clarity<\/h3>\n

For those who already have skin in the game \u2014 sole traders, trading firms, family funds, venture capitalists \u2014 greater institutional involvement can only be a good thing. When the largest institutions decide they want in, it forces regulators to play ball. Not every provision that\u2019s consequently pushed through the statute books will aid the industry \u2014 some will be asinine \u2014 but collectively they provide something that\u2019s been missing for years: clarity<\/em>.<\/p>\n

Is Bitcoin a security? What about Ether (ETH<\/a>) or Solana (SOL<\/a>)? The answer, at present, depends on who you ask. Some agencies seem intent on declaring everything bar Bitcoin a security; others take a more measured approach, focusing their enforcement efforts on the most egregious token sales and shills.<\/p>\n

Related:\u00a010 years later, still no Bitcoin ETF \u2014 but who cares?<\/a><\/strong><\/em><\/p>\n

Institutions can\u2019t trade assets that lie in regulatory no man\u2019s land: they need black and white, not shades of gray. Their increasing participation in the market is bound to provide clearer answers in terms of crypto classification, which will benefit the entire industry.<\/p>\n

In addition, greater institutional involvement is legitimizing digital assets by making them less exotic to those tasked with regulating them. Crypto opponents can\u2019t justifiably claim the industry to be a hotbed of money laundering and wash trading when its most active participants include the world\u2019s leading trading firms.<\/p>\n

Signs of institutional adoption<\/h3>\n

Today, businesses and governments are pressing ahead with blockchain-based initiatives such as CBDC pilots<\/a>. In Asia alone, Hong Kong and the Bank of Japan are exploring programs involving digital currencies.\u00a0<\/p>\n

Meanwhile, banks from the U.S. to Europe are introducing crypto custody and trading services for their clients. And in August, Europe\u2019s first spot Bitcoin\u00a0ETF listed<\/a> in Amsterdam, proving that institutional willpower eventually gets things done.<\/p>\n

Regulators and institutional players are still catching up in terms of expertise to those who helped build the industry from the ground up in its early days through hands-on participation. No one has complete mastery. But as a rising tide lifts all ships, greater institutional involvement will bring benefit to all players, from the humblest yield farmer to the richest whale. Rather than assume any one group has it all figured out, an open and collaborative dialogue is most likely to lead to positive outcomes. Regulators, institutions and early adopters each offer unique insights.<\/p>\n

You don\u2019t have to thank them, but big institutions are a net positive for the industry. Bigger players produce better rules \u2014 and better outcomes for everyone.<\/p>\n

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Gracy Chen<\/strong> is the managing director of the crypto derivatives exchange Bitget, where she oversees market expansion, business strategy, and corporate development. Before joining Bitget, she held executive positions at the Fortune 500 unicorn company Accumulus and venture-backed VR startups XRSPACE and ReigVR. She was also an early investor in BitKeep, Asia’s leading decentralized wallet. She was honored in 2015 as a Global Shaper by the World Economic Forum. She graduated from the National University of Singapore and is currently pursuing an MBA degree at the Massachusetts Institute of Technology.<\/p>\n<\/div>\n

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed here are the author\u2019s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.<\/em><\/p>\n<\/div>\n