The crypto industry in the US has been negatively impacted by regulatory uncertainty and strict oversight from the regulator. That is a major barrier to the development of cryptocurrencies. Despite industry efforts to establish themselves, some digital assets remain uncertain about their legal status.
Currently, cryptocurrencies such as Bitcoin and Ethereum have been placed under the control of the Securities and Exchange Commission (SEC).SEC) as well as the Commodity Futures Trading Commission (CFTC). Amid this power struggle, investors have been looking for alternative investment options.
In a recent report, JPMorgan analysts pointed out how institutional interest is turning to gold. The SEC’s recent crypto crackdown has made many institutional investors hesitant to invest in the crypto industry.
As a result, some institutional investors are choosing to buy gold over bitcoin, JPMorgan said.
JPMorgan pointed out that regulatory uncertainty has led institutional investors to gradually lose confidence in the digital asset industry and seek safer investment options.
JPMorgan’s research report highlights that bitcoin’s bull run in 2023 has been largely driven by retail buying rather than institutional investors.
“Regulatory repression and uncertainty in the industry, made institutional investors doubtful when investing in the sector. Even so, Bitcoin is still up 76% year-to-date. While gold hit a new all-time high,” JPMorgan said.
US Crypto Companies Will Migrate Abroad
Several US-based crypto companies are currently under very close scrutiny. Ripple, Coinbase and now it’s Binance has faced pressure from regulators in the region.
Against this backdrop, some crypto companies have decided to move out of the US and build facilities outside, the JPMorgan report said.
“Binance U.S. subsidiary canceled Voyager asset repurchase agreement, while Coinbase launches Coinbase International, a crypto derivatives exchange operating outside the US, all as one proactive measures in response to growing US regulatory pressure.”
See also: CoinShares Chief Strategy Officer: “There are 2 main catalysts driving Bitcoin’s current price action”