Regulation required to rebuild market confidence: John Ge

According to Matrixport CEO John Ge, regulation is required to restore public trust in the cryptocurrency market.

Speaking at the Singapore Fintech Festival, Ge said that while he is “not a big fan of regulation,” it is necessary to bring stability to the market.

He explained that the lack of regulation has led to a lot of speculation and manipulation in the market. Which has resulted in investors losing confidence.

Matrizport is a digital asset management company with more than $10 billion in assets under management and guardianship based in Singapore. Ge was previously the head of the investment and financing department at Bitmain, as well as an originating partner.

“I think what we need right now is some regulatory clarity,” Ge says:

“I think that will help the market to be a little bit more stable, and also help investors have a little bit more confidence in terms of investing in this space.”

While acknowledging that there are concerns about regulating the cryptocurrency industry, Ge argued that it is necessary to rebuild investor confidence.

In a Tech Crunch interview, Ge said the continuing market decline was unavoidable because of how some firms operated. He says;

“The core problem is that we have seen companies with a black box business model. They borrow money from investors without providing information about how it will be spent.”

A few businesses that were unable to satisfy customer demands went bankrupt in the cryptocurrency market. In recent months, Celsius, Three Arrow Capital, and a few other firms have had financial difficulties, with many having to declare bankruptcy.

Ge believes that the problem with the cryptocurrency industry is that there is a lack of regulation. He says that this lack of regulation is what led to the market crash.

“If we want to see the market grow, we need to see more institutional involvement. And for that to happen, we need better regulation around cryptocurrencies.”

Ge says that one of the main challenges in the crypto industry is that. Some firms are simultaneously players and referees. He states;

“They’re not only doing asset management, but they’re also conducting proprietary trading. A company that engages in proprietary trading should not be an asset manager. Even the most conservative investment strategy has dangers and may result in losses, but it’s critical to communicate with your clients honestly rather than deceptive or misleading them.”

When it comes to regaining confidence in the cryptocurrency market for retail investors. Ge suggested that regulation is required to do so. He states that as new laws are implemented at a greater pace than technology development. The rate of legislation restriction tends to fall behind.

He adds that investors had lost a certain level of confidence in the crypto market. And it will take time for the industry to recover.

Ge also discussed the role of institutional investors in the cryptocurrency market. He says that they can help to rebuild confidence and stabilize the market, but only if they are regulated. Institutional investors have been reluctant to enter the cryptocurrency market due to the lack of regulation.

Since breaking a historical high in November 2021, the cryptocurrency market has lost about $1.9 trillion. The total market capitalization is presently around $1.1 trillion.

Ge said that the Chinese government is working on regulations that will allow institutional investors to enter the cryptocurrency market. He added that these regulations are expected to be released soon. Cryptocurrency regulation is a highly debated topic.

Some countries, like China, have taken a hard-line stance against cryptocurrencies. Others, like Japan, have been more welcoming. Ge states that the Chinese government is focused on rebuilding investor confidence in the cryptocurrency market.

Do you think with Ge on this? Whatever it is, hit the comments section and drop your comments!