Crypto to see long-term benefits from new infrastructure bill regulations: analyst

The latest congressional infrastructure bill, which includes provisions on the regulation of crypto assets, could help legitimize cryptocurrencies within the mainstream financial community, says MoffettNathanson Partner Lisa Ellis.

“What’s been holding up the crypto ETFs is that the SEC has very stringent requirements for things like liquidity, transparency, price stability,” Ellis said.

“[There are] very well-established rules when it comes to stock investing,” she said. “Those same rules apply to crypto. It’s just that it’s been sort of the ‘Wild, Wild West,’ and so consumers should be aware that if they have not already started to make sure that they’re getting the right reports from their broker, their crypto broker, and reporting it on their tax returns… they should start doing that or they’ll potentially be subject to an audit going forward.”

Although the new rules could cause a drop-off of crypto activity initially, Ellis told Yahoo Finance, “over the long term we view this as absolutely a positive.”

“More crypto clarity around crypto regulation helps legitimize and mainstream crypto investing, opening up crypto investing to a much broader array of … mainstream investors,” she added

The acknowledgement of crypto in such a significant piece of legislation could set precedent for greater definition of the legislative environment surrounding crypto technology in the US.

“Lawmakers are well-versed enough to be thinking of this and putting it in the infrastructure bill is certainly a very different place than we were in even three to four years ago in terms of the mainstreaming and legitimizing of crypto,” Ellis said.

With greater clarity and transparency in the legislative and regulatory environment, Ellis added, the private sector is expected to incorporate crypto in a variety of ways in the near future. Some publicly-owned corporations have chosen to purchase large amounts of crypto to hold as an asset, whereas new-age financial services companies like Robinhood (HOOD) have begun allowing users to trade bitcoin (BTC-USD) or other cryptocurrencies on their platforms. Experts have noted that cryptocurrencies and crypto technology represent one of the fastest growing areas of the economy even now.

In 2021, wider adoption of crypto tech has occurred within mainstream financial institutions and corporations. Tesla (TSLA) began accepting bitcoin as payment and simultaneously made a large investment in the cryptocurrency back in February. Elon Musk has since halted the acceptance of bitcoin, though recent reports suggest the company may resume the practice sometime in the future once environmental sustainability issues have been addressed.

Other public companies, such as Square (SQ) and Microstrategy, have also amassed large crypto balances in recent years.

“We’ll probably then see a much wider array of corporations start to include crypto assets as one of the investment asset classes they use,” Ellis said.

Ihsaan Fanusie is a writer at Yahoo Finance. Follow him on Twitter @IFanusie.

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