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CRYPTO DERIVATIVES MARKET EXPECTS TOUGHER REGULATION

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The turbulence that has roiled cryptocurrencies this year is expected to drive a more severe approach to the asset class from regulators, the latest Acuiti Crypto Derivatives Management Insight Report has found.

The Acuiti Crypto Derivatives Managers’ Insight Report is a quarterly report based on a survey of the Acuiti Crypto Derivatives Expert Network of senior executives operating within crypto derivatives markets.

The Q3 report’s key findings were:

  • 59% of the network expect a more severe regulatory approach will be the main medium to long term effect of recent falls in crypto prices
  • 50% of the network think the main consequence will be the market moving closer to Trad Fi infrastructure
  • 58% of the network believe that banks will come to play a significant role in permissioned De Fi
  • 84% of the network believe Bitcoin will rise back above $65,000, but opinion ranges on how long it will take to do this

The accelerating pace of regulation will be one driver of an increasing convergence between Trad Fi and De Fi. Banks are expected to play an increasingly pivotal role in crypto markets in the future once regulation is established.

The report’s findings also show that expectations of further consolidation are high — among crypto exchanges but also lenders and other crypto services providers. While a key takeaway from the report was long-term optimism about the market’s prospects, more near term pain is also expected.

“Our latest Insight report shows that regulation, while long courted by the cryptocurrency industry, is expected to take a more severe form than was anticipated prior to the recent price falls,” said Ross Lancaster, Head of Research at Acuiti. “Some crypto derivatives users have a head start in this respect as these instruments already fall under financial frameworks. But nonetheless, the industry is about to undergo a period of profound change.”

To download the full report visit https://www.acuiti.io/crypto-derivatives-management-insight-report-q3-2022