Cryptocurrency exchanges in the U.S. will be shunned by investors and the Biden administration will force the multi-trillion dollar sector of the future of money away from America, according to the chief executive of a leading financial advisory and fintech.
The comments from deVere Group’s CEO and founder Nigel Green follow the U.S. government signing the $1.2 trillion infrastructure bill into law, weighing on the shares of publicly owned, U.S.-based exchanges.
Green explained that within the infrastructure spending package is language increasing the tax reporting requirements for cryptocurrency transactions. This has been fiercely opposed by the digital currency sector and investors.
“We’ve seen the U.S. infrastructure bill get signed, which initiated a sell-off from traders who are worried about increasingly levels of regulation and taxation,” he said.
“The inclusion of the extra reporting clauses for crypto is a huge miscalculation from the Biden administration.
“With additional reporting, which is onerous and costly, many investors will not choose a U.S.-based cryptocurrency exchange. They will simply go somewhere else; to another exchange, based away from the over-reach of the U.S. authorities.”
Green explained that this extra burden will likely move a large part of the growing cryptocurrency industry itself out of the United States. This is a sector now worth more than $3 trillion which is expected to expand exponentially.
Prices driven by inflation
Despite recent price drops in Bitcoin, after the fresh all-time high, the deVere CEO believes that inflation, amongst other factors, will help keep driving prices higher for the short to medium term.
“It’s a global issue with businesses raising prices as supply chain bottlenecks and a shortage of qualified workers push up costs.
“And it’s one that is likely to last until at least the beginning of the second quarter of 2022, when pressures should start to ease.
“Against this backdrop, and amid some peaks and troughs along the way as markets never move in a straight line with traders taking profit, we can expect to see the price of Bitcoin and other major cryptocurrencies continue their upwards trajectory.
“Bitcoin is widely regarded as a shield against inflation mainly because of its limited supply, which is not influenced by its price.”
This ‘inflation shield’, said Green, will bring to the crypto market growing investment from major institutional investors, bringing with them capital, expertise and reputational pull – and further driving up prices.
The deVere boss concluded: “History will show that the inclusion of additional reporting for crypto transactions in the U.S. infrastructure bill was a huge error.
“It will have the effect of investors choosing non U.S.-based exchanges and moving much of the crypto sector – the industry of the future of money – out of America.”