In 2017, cryptocurrencies officially made it mainstream. Bitcoin’s was able to rise from around $1,000 during the start of the year to near $20K by mid-December. Everything involving cryptos, ICOs, and blockchain technology instantly clinched the attention of hungry investors looking for a way to make some money.
But by 2018, things didn’t look well for the industry. Regulatory changes triggered a bearish market after investors realized that regulators could actually ban cryptos at any given time. But for those who truly believed in cryptocurrencies, these changes are necessary in order to mature the market and to attract institutional investors.
For Elvira Nabiullina who is the head of the Central bank of the Russian Federation, she claims that the hype on cryptocurrencies has begun to cool. She made this statement during the FINOPOLIS Innovative Financial Technology Forum.
Beginning to Disappear?
According to Nabiullina, who is a famous economist and former economic advisor to Russian President Vladimir Putin, she thinks that the failure of the majority of blockchain projects and ICOs made investors realize the reality that they are dealing with in the industry.
Nabiullina mentioned that “We are holding the FINOPOLIS forum for the fourth time. Earlier, this event used to witness a cryptocurrency fever everywhere. But now, it is visibly beginning to disappear”. She also added that “Back in old times, technologies like blockchain caused a great deal of enthusiasm, but, in our opinion, now a more sober attitude towards such technologies has begun”.
Regulatory Changes in Russia
Putin mentioned in the last few months that there will be regulatory changes in Russia. There was a time that he even endorsed blockchain. However, things are going slow. However, investors are quite optimistic regarding the outcome of blockchain and cryptocurrencies in Russia. In fact, Nabiullina shares the same optimism towards the technology despite the bearish market. She said that “Business is trying to improve such technologies, looking for cases for the practical application of them”.
ICO as an Efficient Method of Raising Funds?
Nabiullina thinks that initial coin offering (ICO) model is a great way to raise funds. That’s a stark difference between her and her peers who think negatively about ICOs. In fact, according to a study, one in every five ICO is a scam. And for this reason, the central bank chief also reminded that there are plenty of frauds especially in the first wave of ICOs. 90% of the ICO projects in the last two years were either a failure or a scam.
She is sending mixed signals when it comes to the niche. In 2017, she compared the crypto craze to gold fever. However, she later expressed disinterest towards regulating cryptocurrencies and putting them in the same category as fiat.
Cryptocurrencies have grown in popularity over the years. However, her observation is also true that interest may have already fizzled. But this isn’t exactly a bad thing. In fact, what it could’ve eliminated are those that are simply looking for a quick way to earn some money. With a Bitcoin ETF that could become a reality, and institutional investors entering the picture, slowly, the crypto market is becoming more and more mature.