Navigate Crypto Regulatory Waters in 2022 With BITQ


This year saw an enormous amount of growth for crypto assets, and next year is anticipated to continue seeing forward momentum within the space.

However, along with giant leaps forward this year came increasing regulatory pressure with China banning crypto activities entirely and the U.S. beginning to flex its regulatory muscle as well. These regulatory pressures are expected to continue to hang over crypto next year as well, and experts discussed with CNBC what areas they see regulation targeting most prominently in 2022.

“2022 will be a big year on the regulatory front, no doubt,” said Vijay Ayyar, VP, corporate development and global expansion for the Luno crypto exchange. “The interest from various governments, and especially the U.S., to bring regulation into the crypto space has not been higher.”

Ayyar anticipates that next year will bring further clarification for cryptocurrencies other than bitcoin and ether, which the SEC is currently contending are not securities. Currently, Ripple, a blockchain company, is being sued by the SEC for sales of their tokens, which the regulatory watchdog claims are an unregistered security; Ripple has countered, claiming that the tokens should not be classified as a security.

Stablecoins are also anticipated to come under the regulatory lens as the SEC considers whether there is enough underlying collateral that provides stability; previous collapses of collateral stability were seen during the mortgage and housing crises.

DeFi is also expected to experience continued scrutiny and possible regulation. The Bank for International Settlements called for DeFi to be regulated this month over concerns that services claiming to be decentralized were actually not. DeFi remains a point of contention and concern for regulators within the U.S., and pressures are most likely to increase in 2022.

By investing in the companies that are working within the crypto economy instead of directly into cryptocurrencies, investors can diversify their risk. The Bitwise Crypto Industry Innovators ETF (BITQ) offers investment into some of the largest companies within crypto within a variety of segments.

BITQ tracks the Bitwise Crypto Innovators 30 Index, an index with at least 85% allocation into companies that are cryptocurrency exchanges carrying bitcoin and other cryptocurrencies, crypto miners, mining equipment companies, and service providers. The remaining 15% is allocated to large-cap support companies with at least one major part of their businesses dedicated to crypto.

BITQ carries crypto companies such as Coinbase Global Inc (COIN), a major crypto exchange, at 10.49%; Silvergate Capital (SI), a bank that provides services for crypto exchanges, at 9.85%; and crypto mining companies such as Hut 8 Mining (HUT) at 4.28%.

The fund has an expense ratio of 0.85% and net assets of nearly $127 million.

For more news, information, and strategy, visit the Crypto Channel.

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