The market relies on signals. Signals come in different formats. Sometimes they come as policy directives or policy initiation. The other times they come as program implementation and most of the time the market anticipates out of the conversations that involve key people in the Government.
It does not matter how that signal is received. The most important aspect of those signals is how they are perceived by the millions of minds in the crypto market.
Right now, the signal that we are getting from the Government tends to be channeled into saying ‘the crypto sector is bad’.
Look at the recent events from the States. The government always has this punishing tone whenever they mention the crypto sector. The stable coin crackdown, the kraken staking issue, the coinbase issue, the BUSD fiasco and many others that came out of the government. Rather than being constructive and suggesting the government is trying to fix the issue by taking care of the few bad actors, it looks like the government is portraying the whole crypto sector as bad.
While reviewing the government communications in the west, I always get a sense that they are trying to protect the innocent citizens from crypto as a whole. There is a subtle difference between bad actors in the crypto space and crypto as a bad space for the commoners. I have not seen that distinction being made when the Governments in the west address the sector.
What’s happening because of that? Talent migration
The United States is considered a land of opportunity. This is where innovation thrives and the best minds perform to their true potential. Innovation does not happen in a vacuum. It requires policy and institutional support which is only possible if you have the space to grow with the right attitude.
The current policy mindset in the West is not that of innovation. It is more like obstructing the innovation that can happen with the blockchain tech. This is partly happening because unlike other innovations- such as the internet- the blockchain tech is hitting the financial and capital system. The governments are catchip up and are trying (likely) to bring everything under their regulation. I don’t think anyone is against the rules and regulations. The only argument here is to open and up and stay positive towards the tech.
Asia- the epicenter of the next bull market
I was listening to a podcast recently. The expert guest shared a few interesting facts.
One, HongKong is opening up to crypto unlike the West and mainland China is not interfering. This is a signal. It can be speculated that HongKong is allowing retail investors to buy and sell crypto assets given the exchanges are under the regulation. Rather than sounding like we will regulate bad guys, this is giving a message that we want to welcome crypto traders but these are the rules. Changing a narrative like that would mean a lot for the sector.
The guest also highlighted the fact that proper regulations in Japan are positioning the country to inspire innovation and acquire crypto shares.
This means that from the narrative point of view, Asia is being considered warm towards crypto retailers unlike the West. Well, this narrative can change when a new scandal resurfaces. The crypto sector is really finicky. For now, the general narrative does not consider the West to be the best place to innovate in the crypto sector.
I don’t think the crypto sector is bad. There are bad actors in the crypto sector.
