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Regulatory clarity will drive the next bull run — hedge fund co-founder

A former Credit Suisse risk chief believes the next cryptocurrency bull market will come from “regulatory clarification” in the US, which he expects to occur in early 2023.

Speaking to Cointelegraph, former head of valuation risk at Credit Suisse, C.K. open,” he said.

Chen, a former executive at investment bank Credit Suisse, left his job in July 2021 to co-found ZX Squared Capital, a crypto hedge fund targeting family-owned offices and high-net-worth individual clients. .

Chen said there has been a major shift in the stance of traditional financial institutions towards cryptocurrencies recently, with many institutions stepping into the crypto sea for the first time.

In August, one of the world’s largest asset managers BlackRock partners with cryptocurrency exchange Coinbase Providing access to Bitcoin for institutional investors (Bitcoin) and crypto via Coinbase Prime.

These days, some major names Finance teams collaborate to create digital assets An institutional and retail exchange backed by financial giants such as Charles Schwab, Citadel Securities and Fidelity Digital Assets.

“Today, we see more and more traditional financial institutions getting involved in the crypto space. […] We can see tremendous interest,” said the hedge fund manager.

Cheng also stressed that there are more people “waiting for more clarification on U.S. regulations,” before saying:

“This will open the doors for traditional financial institutions, and more institutions and investors will enter the space. So I think that is the beginning of the next bull market.”

he also Executive Order from US President Joe Biden Earlier this year was an important signal for traditional investors, but when it comes to how crypto trading will be regulated and whether cryptocurrencies are considered commodities or securities, the “devil is in the details.” ‘ he admitted.

“From an institutional investor perspective, as long as the regulation is clear, they have a very clear path to avoid getting into regulatory troubles. […] It will draw institutional investors into the space,” he added.

Related: ‘Fear of the Unknown’ Keeps Traffic Investors Away from Cryptocurrencies — Bloomberg Analyst

Asked when the tipping point would occur, Mr. Chen said he expected regulatory clarification to be “concrete” early next year.

“Hopefully by the beginning of next year there will be something more concrete, and that will help the market in terms of people’s perceptions and emotions. [of crypto]I think regulation helps with that. ”

Asked about how the BTC price will behave in the short term, Cheng said he expects October to be a “very volatile” month for BTC.

“October is a very volatile time, especially when coupled with high inflation, there will be a lot of debate about policy changes with the Fed. It could lead to a recession.”

Chen believes this uncertainty will cause a lot of volatility in both the stock and crypto markets, but believes it will stabilize by next year. At the same time, “another bull market” could start in the months before the next Bitcoin “halving” in 2024.