Analysts: Crypto Market Crash is 'A Bump in the Road' Before Real Growth Begins

Omar Faridi
  • Analysts and executives at Bloomberg's Crypto Summit have said that crypto market will gradually recover.
  • What we are seeing now, with the market crash, is just a part of growing pains, or in other words, a "bump in the road."

James Bevan, the chief investment officer (CIO) at CCLA Investment Management, one of the UK’s largest charity fund managers, recently stated that he does not think the cryptocurrency market crash is “an existential crisis.”

Just A "Bump In The Road"

Bevan, who has previously served as CIO at Barclays Asset Management Group, explained that the drop in digital currency prices is more like “a bump in the road and institutional investors have had plenty of bumps in the road in conventional currencies and transaction systems.” Bevan’s comments regarding cryptoassets came during a panel discussion at the Bloomberg Crypto Summit - which took place in London this week.

Other panelists such as Lewis Fellas, the co-founder and CIO at Bletchley Park Asset Management, a UK-based cryptocurrency fund, said the new stablecoins market has a lot of potential. According to some estimates, there are currently about 120 different stablecoin-related projects that are under development.

Although the panelists all seemed to think digital currency prices would not recover anytime soon, they did forecast that the markets would gradually recover as they were only going through growing pains. Moreover, the panel members said the crypto market will likely see more regulations in the future, more involvement from institutional investors, greater level of integration with traditional asset classes, and lower volatility levels.

Stablecoins, Security Tokens May Become Top Performers

Two key areas of growth identified by the panelists were stablecoins and security tokens, which are another new digital asset that are essentially contracts representing ownership in traditional assets such as stocks or real estate.

Commenting on the current state of the digital asset ndustry, Fellas remarked:

I think we’re just getting started. I can see a huge expansion.

Ryan Radloff, another panel member and the CEO of CoinShares, a crypto treasury management firm, noted that if different jurisdictions allow for less stringent digital currency regulations compared to others, then that could pose certain challenges. For instance, it could make it more challenging for crypto-related businesses in tightly regulated places (e.g. US, UK) to compete with smaller jurisdictions such as Malta which have fairly lenient regulatory guidelines.

Acknowleddging The Work Being Done

During the panel discussions, Marieke Flament, the global chief marketing officer at Circle Internet Financial, acknowledged that “It’s good to see some larger countries step through and show the route” when it comes to formulating regulatory guidelines for digital currencies. However, he added that we should “not discredit the work that others [in other jurisdictions] are doing, because if you have no one starting then everyone is waiting.”

Although Flament did not specify which jurisdictions are “waiting” as others take the first step, India is among several other nations that has not moved forward as expected with developing a regulatory framework for cryptocurrencies. As CryptoGlobe reported in early September, India's financial regulator, the Securities and Exchange Board (SEBI), had sent a group of its representatives to meet with regulators in the UK, Switzerland, and Japan.

The group was sent to learn how digital assets are regulated in all three nations. At the time (in September), India’s reserve bank (RBI) had released a report acknowledging the benefits of learning how regulators in other countries respond to new financial technology

Kraken Unveils Potential Attacks Against Ledger Nano X Hardware Wallet

Kraken Security Labs, the cybersecurity division of the popular cryptocurrency exchange Kraken, has unveiled two potential attacks against the Ledger Nano X hardware wallet, which have now been patched.

The attacks, according to Kraken’s cybersecurity arm, could see bad actors get access to victims’ computers, and use said access to install malware that would allow them to steal their cryptocurrency holdings.

The first attack, named Bad Ledger, would require the hacker to first tamper with the device before it was sold to the victim – something that can happen if the victim buys a Ledger from a seller on eBay, for example – to add a protocol that behaves like a keyword and can send malicious keystrokes to the victim’s computer.

In a video Kraken shared, cybersecurity experts use an infected Ledger Nano X to open their website on a computer.

The second attack, dubbed Blind Ledger, could see hackers run malicious code on a non-secure processor to turn off the Ledger Wallet’s display, even if the device was running on its battery. They could then use social engineering to convince a victim top press several buttons to trigger a transaction that would move the funds to the hacker’s address.

As the display would be disabled, the victim could not check the transaction was being sent to that wallet. To stay safe, Kraken recommends users only buy Ledger devices from trusted stores, always verify transactions on the Ledger Now wallet, and be wary of the devices acts strangely.

Ledger, in response to Kraken’s findings, upgraded its firmware to protect its users against these attacks.

Featured image by Alejandro Escamilla on Unsplash