As Bitcoin hits all-time price highs, regulation must now become a major priority for financial watchdogs, affirms the CEO of one of the world’s largest independent financial advisory organisations.
The call-to-action from Nigel Green, chief executive and founder of deVere Group, comes as the price of Bitcoin hit a new record high, surging past $61,000 on the deVere Crypto exchange on Sunday for the first time.
Mr Green says: “Whether crypto cynics like it or not, there’s no getting away from the fact that Bitcoin is becoming an increasingly important part of the global financial system.
“Bitcoins in circulation are now worth $1 trillion, with prices having rallied 890% over the last year. Most major financial institutions, including investment giants and payment companies, are now backing the world’s largest cryptocurrency, and there’s ongoing soaring interest from retail investors.”
He continues: “The move towards digital currencies is going to increase - and at pace - over the next few years. This is why financial regulators must now make regulation of the crypto sector a major priority.
“With a growing dominance, Bitcoin and other cryptocurrencies must be held to the same standards as the rest of the financial system with a robust, workable international framework.
“This will help reduce any potential disruption to global financial stability, protect investors, tackle illicit activity and deliver an economic boost to countries that adopt and adhere to it.”
Previously, the deVere boss, who is a long time, high-profile cryptocurrency advocate, has said that one of the best ways to address the regulatory issues is via the exchanges.
“Nearly all foreign exchange transactions go through banks or currency houses and this is what needs to happen with cryptocurrencies. When flows run through regulated exchanges, it will be much easier to tackle potential wrongdoing, such as money laundering, and make sure tax is paid,” he has noted.
“For this to happen, banks will need to open accounts for exchanges, which is why they must be regulated.”
The deVere CEO concludes: “We’re at an important point for Bitcoin, which is now worth more than many countries’ GDP.
“Financial watchdogs need to bring this asset class into the regulatory tent sooner rather than later via the exchanges.”
President-elect Joe Biden will deliver a boost to global stock markets and the U.S. and world economy, affirms the CEO of one of the world’s largest independent financial advisory organizations.
The observation from Nigel Green, chief executive and founder of deVere Group, comes as the Democrat candidate won the race to become the next U.S. president, defeating Donald Trump following a nail-biting vote count after Tuesday's election.
Biden won more than 73 million votes, the most ever for a U.S. presidential candidate.
Mr Green says: “President-elect Joe Biden will deliver a boost to global stock markets and the U.S. and world economy.
“Although a Biden win was pretty much priced-in by the markets, his victory will eliminate uncertainty – which they loathe – and they will rally further as a result.
“Even possible legal challenges from Trump will be dismissed by investors who will instead be focusing on the renewed certainty and stability that a Biden White House will bring, including in key areas such as trade tensions with China, keeping the U.S. in the World Health Organization, resigning the Paris climate agreement, and abiding by other international agreements and long-standing international allies.”
He continues: “Biden will need to work with the Republican-led Senate to secure fiscal stimulus to bolster the economy. He might struggle to get the $3trn wanted by Democrats, but some package is likely.
“This will buoy the markets and would have investors think about a broader-based economic recovery – rather than a narrower, tech-heavy one.
“As the world’s largest economy, sustainable, long-term growth in the U.S. will have a positive ripple effect for the world economy.”
The reduced chance of massive fiscal stimulus will also mount pressure on the Federal Reserve “to inject further liquidity,” he notes.
In addition, the Biden win without full Senate support means less risk of regulation and higher corporate and personal taxes, which will give more oxygen to the markets and economy.
Mr Green adds: “In general terms, sectors to benefit from the Biden administration’s agenda include renewable energy, industrials and infrastructure, and small caps.”
The deVere CEO concludes with a warning: “Biden will need not only to work with the Senate but to heal a divided country.
“The world is looking at America, it needs to lead the world economy in a positive, forward-thinking and smartly way - and at pace.
“If it doesn’t, we can expect American economic dominance to ultimately be replaced by an emerging and fast-growing Asia.”
U.S. stock markets might be ‘on fire’ as earnings season begins – but Wall Street has not priced in a second wave of coronavirus, warns the CEO of one of the world’s largest independent financial advisory organizations.
The warning from deVere Group’s chief executive Nigel Green comes as the S&P 500 gained over 2 per cent in early trading, following gains in European and the Asia-Pacific markets.
Mr Green notes: “This week, with earnings season underway, we are going to see just the beginning of how corporate America and Europe have been hit by the coronavirus pandemic. The results are likely to be dismal and forecasts for the rest of the year can be expected to be revised down.
“However, investors are overlooking this. Instead, they are clinging on to relatively positive economic news from China, hints that some major lockdowns in Europe and elsewhere are being eased, and that confirmed cases are falling –meaning economic activity can be revived.”
He continues: “It’s truly astonishing that as global economic growth forecasts are looking bleak and most countries are battling potentially one of the worst downturns in a generation, the markets are on fire and trading as though these are normal times.
“They are not normal times. We are in unchartered waters. This isn’t the time to be complacent as I doubt the bear market is over. We shouldn’t call the bottom yet.
“It would appear that the financial markets are oblivious to the obvious and serious financial threat of a potential second wave of the coronavirus. Alarmingly, this does not seem to have been priced in.”
Mr Green goes on to add: “The markets’ bullish sentiment during this mass disruption and dislocation would be baffling enough, but there are also other headwinds on the horizon.”
These, he notes, include the U.S. Presidential election, the threat of a no-deal Brexit, and the longer-term inflation risks.
The deVere CEO observes: “We can expect markets to remain volatile in the short-term.
“Many savvy investors will be riding the wave of volatility to build up their portfolios through lower entry points and seeking value and decent returns in order to grow their wealth. Why? Because history teaches us that over the longer-term the performance of stock markets is fairly predictable: they go up.”
Nigel Green concludes: “The markets are growing more positive about the Covid-19 crisis.
“But to sidestep taking a potentially massive hit, investors must avoid complacency and emotional decisions through solid financial strategies.”