Potential Catalyst Next Week for Crypto Markets

Next week the G20 (Group of 20 Economies) will be meeting in Buenos Aires and among their talking points will be cryptocurrencies. Given the increase of attention received as well as the price appreciations, government have taken amongst themselves to evaluate next steps for their approach regarding the new asset class. As we have heard from singular countries the intent to regulate, this is the first major meeting of minds that will likely determine the approach to attend to cryptocurrencies.

Central Bankers and Finance Ministers will surely discuss how to address the risks and opportunities that these assets bring to economies. Blockchain will most likely be of particular interest as it may add to the tools these government institutions have to become more efficient in a more globalized society which needs faster settlements and increased transparency in the financial markets. However, given the decentralized nature of the bigger assets in the market, some may see them as threats to the bigger players of an established traditional financial systems (i.e. Banks). The major banks themselves such as Bank of America and JP Morgan have been the latest to recognize the risk the movement may pose to the traditional system. Given a world where over 2 billion people remain unbanked, the technology and the cryptocurrencies associated with it are highly likely to remain in the priorities of said organizations.

However, determinations will not come immediately as there is certainly a low amount of knowledge still in these traditional organizations. Their first intent should not be to block innovation but to first understand it. The immediate concerns will more likely be how to protect investors from fraud and establishing anti-money laundering safeguards. Market regulation will likely come in the future as more knowledge is distributed amongst the group.

It will be interesting to see how the location of the meeting impact these thoughts as Argentina and its people has long been seen as a beneficiary of the cryptocurrency movement given strict capital restrictions and high inflation concerns that have impacted the currency for years. Like in most G20 meetings, protestors will be present not afraid to voice their opposition to the capitalist regimes that reign the G20. I would not be surprised if the next great meme will be found during these meetings.

How do you think any rhetoric from this meeting will impact markets? Could it be the catalyst needed to tame the FUD concerning regulation? Or will the organizations take the recent weakness in market as an opportunity to protect the banks and try to proclaim the death of cryptocurrencies? Let me know your thoughts on what we should watch out for as the meetings approach.

Source: https://www.reuters.com/article/us-crypto-currencies-bis/central-banks-told-to-think-twice-before-boarding-bitcoin-bandwagon-idUSKCN1GO2JX

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