In January, Davos hosted the World Economic Forum – this year under the sign of solidarity with Ukraine – and the hottest topic was the cryptocurrency regulation.
In a partner text, cryptoinvestor Sergei Tron, who participated in the events in Davos, summarized the forum and told about the crypto market regulation and the post-war recovery of Ukraine.
Bitcoin is unstoppable
This year the World Economic Forum was held under the sign of solidarity with Ukraine. Its participants discussed the crisis that affected the global economy because of the war, as well as the post-war recovery of my country. The readiness to support Ukraine at the level of countries and the world’s leading corporations was discussed on many forum panels.
The second topic under debate was the cryptocurrency regulation: blockchain technology and bitcoin legalization in the world. Last year at Davos, bitcoin was discussed amid euphoria caused by the bullish trend and the rising rate, but this time the sentiments were more conservative and businesslike. Everyone is waiting for specific details from governments and regulators.
The world’s leading financiers have insisted that regulations for bitcoin as an integral part of the global financial architecture must be implemented as soon as possible.
This was mentioned by the authorities, in particular, by Singapore’s Senior Minister Tharman Shanmugaratnam and François Villeroy de Galhau, a member of the European Central Bank’s Board of Governors. Market participants, such as Colm Kelleher, Chairman of UBS Group AG, also raised this topic.
Colm Kelleher explicitly said that blockchain and bitcoin technology are unstoppable, so we need to adopt a regulatory framework for cryptocurrency regulation. Villeroy de Galhau talked about introducing basic rules that would prevent fraudsters and money laundering.
Nigel Green, CEO of deVere Group, called regulation a forum priority. He said that bitcoin’s share in investors’ portfolios is increasing, which means that cryptocurrency’s role in the international system is growing. And the lack of laws threatens the global financial industry.
Bitcoin legalization
The process of bitcoin recognition is developing at a fast pace.
The European Parliament is set to adopt comprehensive regulation of the crypto-asset market (MiCA) in April. MiCA includes rules that apply to issuers of unsecured cryptoassets, stackablecoins, trading and custodial platforms.
The main thing is that when the European Parliament passes a law, it will legalize bitcoin in all EU countries and, accordingly, financial transactions with cryptocurrency. This was planned to be done earlier, but the MEPs’ vote had to be postponed for a technical reason: the 400-page file must be translated into 24 official languages of EU countries.
The U.S. House of Representatives has formed a subcommittee with a focus on digital assets within the Financial Services Committee. The subcommittee will develop rules for federal regulators on cryptocurrencies and promote digital financial technology. This initiative emerged after the FTX exchange collapse.
Naturally, at Davos, both during the meetings and on the sidelines, there was discussion about the rise of bitcoin. As I said many times last year, spring is near. We saw a 14-day positive trend where bitcoin rose continuously – from January 4 to January 17 inclusive. This result is the second highest ever after the 15-day uninterrupted rise in 2013. The exchange rate was up 28%. Of course, it has already corrected, but it is the trend itself that matters.
Predictions of subsequent growth are abound, from the cautiously optimistic to the fantastically positive. Anthony Scaramucci, an American financier and founder of the SkyBridge Capital hedge fund, said that bitcoin “may reach $100 thousand” within the next three years. According to him, the rate will strengthen in stages. The main trigger will be the moment when most investors will accept bitcoin as an asset class.
New technology will help rebuild after the war
I am not going to predict specific numbers, but I can assume that the year for the main digital currency will be stable, with slight fluctuations. One of the reasons for this expectation is that the IMF has softened its forecast for this year. Gita Gopinath, deputy director of the fund, said that while 2023 was previously called “tough,” they now expect the situation to improve in the second half of the year. According to her, there is a chance that the global economy will be able to avoid recession this year.
Important words not only for the global economy, but also for Ukraine. Financial giants such as BlackRock, which recently included bitcoin in its investment portfolio, and Goldman Sachs have expressed willingness to invest in Ukraine’s post-war reconstruction. They have offered to help President Zelenskyi “create a new country, a better Ukraine.” International bankers see Ukraine as “a leader in innovation, new decarbonization technologies.”
In general, following the results of the forum in Davos, I look into the future with optimism. I am especially pleased with such attention to my home country and the desire of world bankers to invest in the post-war reconstruction of Ukraine. As an investor, I will definitely take part in this process.
