CoinShares Chief Strategy Officer (CSO), Meltem Demirors, has sounded a cautionary note regarding the state of the cryptocurrency markets following a summer characterized by subdued volatility. In a recent interview with Bloomberg, Demirors highlighted the prevailing uncertainty in the crypto industry, a factor she believes is causing hesitation among various market participants.
Demirors expressed her concerns, saying, “Sentiment is expressed as flow in the market, and if we look at flows, I jokingly call it the summer of apathy – the summer that we just had.” Despite numerous positive developments in the crypto space, such as increased flows into crypto structured products and a surge in Bitcoin prices following the news of BlackRock’s spot Bitcoin exchange-traded fund (ETF) application, the last month has witnessed a stark change.
She continued, “But over the last month, we’ve seen $300 million in outflows. Last week, 70% less trading volume in publicly listed crypto products, and we’re also down 30% in trading volume on the spot and derivatives side. That’s the summer of apathy with all of this uncertainty… There’s just a lot of uncertainty, and right now what we’re seeing is that the summer of apathy has the potential to turn into a winter discontent as we continue to see investors, traders, market makers sitting on the sidelines.”
Demirors emphasized the need for regulatory clarity in the United States, a sentiment shared by both Democrats and Republicans. She stressed the urgency of Congressional action, stating, “I do think we’re both parties agree, and where we’re seeing a lot of agreement is that something needs to be done. I’ve been in this industry for almost a decade. I live in the United States. I’ve built multiple businesses dealing with crypto in the United States. I don’t want to have to consider moving just because we can’t get our stuff together on the policy side.”
She further pointed out the necessity of a cohesive regulatory framework originating from Congress, as the multitude of agencies involved in crypto regulation currently lack consensus. Demirors expressed apprehension about the complexity of untangling the existing legal issues, lawsuits, and disparate precedents, emphasizing the need for bipartisan efforts to move the industry forward.
In summary, Meltem Demirors’ warning about the “summer of apathy” potentially evolving into a “winter of discontent” underscores the critical need for regulatory clarity and bipartisan action to foster a more stable and attractive environment for cryptocurrency businesses and investors in the United States.