Regaining trust
“Regaining trust” – a cartoon that illustrates how 2023 will likely see increased consumer protection in the crypto industry.
If crypto bulls like Mike Novogratz, CEO of Galaxy Digital still believe that Bitcoin will get to $500,000 in a future date, the industry ironically needs to embrace the very group of people it is supposed to be championing against, namely government regulators.
After consumers lost their shirts at crypto investment firms (e.g. Celsius) and exchanges (e.g. BlockFi), getting consumers comfortable again is going to require confidence boosting.
Perhaps it will require a form of deposit insurance, similar to FTIC’s bank deposit insurance that covers the first $250K of a consumer’s deposits, which was set up by President Roosevelt following the bank runs of the Great Depression.
Other suggestions are that crypto asset firms need to have the same type of public reporting laws as regulated financial institutions and reduce the percentage of their balance sheet with risky assets.
All of these would help increase consumer and institutional investor confidence, resulting in more assets flowing back into the crypto market.
The question for the crypto industry is whether it has the maturity to recognize that this is a necessary step for it to become the future of finance and deliver on its heralded vision.
