Regulators are breaking the crypto industry. Here is how to adapt

For the past decade, crypto trading has been a virtual gold rush as amateur and professional investors alike have flocked to the industry. It has been possible to make (and lose) a fortune overnight, and there are ways to realize such sizeable profits from a single trade. That’s all about to change.

More and more regulatory moves from governments around the world, such as the recent United States Financial Crimes Enforcement Network announcement, leave no doubt that crypto is poised for a radical transformation. This will have consequential implications for investors, but will it be for the worse?

One thing is clear: We will no longer see anything similar to decentralized finance or initial coin offerings in terms of the speed and size of returns. In this article, we’ll review why that is and discuss upcoming alternative ways for investors to continue to make money with cryptocurrencies. Finally, we’ll take a closer look at one company that is shaping the future of crypto today and what it could mean for your crypto investment portfolio.

How money is made in crypto

To understand why the common ways of making money in crypto have become problematic, we need to first understand what those ways are. There are two primary approaches to obtaining compelling returns in crypto:

Surfing the hype cycle: This means buying a token before it pumps and selling it before the dump in short-term flip-flops. Given a lack of patience, this is what most crypto investors look for in a trade.
Alt holds: Long-term hold of decent altcoins can provide triple-digit returns in the horizon of just a few months or years.

Regulation fundamentally reshapes the industry

The principal reason why get-rich-quick schemes are going to vanish is increasing regulation. In July 2019, the Financial Action Task Force, an international regulatory body, issued guidelines on regulating digital assets. These rules are now being adopted by FATF members, which includes more than 200 jurisdictions.

The rules include:

Prohibition of market manipulation.
The requirement to register investment tokens as securities.
KYC requirement for all exchanges and wallets.

These rules essentially eliminate primary ways of making money with crypto:

The prohibition of market abuse and disclosure rules pushes pump-and-dump coins into a very obscure area.
Requirements to register tokens as securities dramatically increase cost and reduce access to altcoins for investors.

And these rules don’t just exist on paper. Since 2018, the U.S. Securities and Exchange Commission alone filed 55 lawsuits against token issuers, including Telegram, EOS and Ripple. As a result, it has become increasingly difficult to launch unregulated crypto coins that promise 100%+ returns.

How to invest in the crypto of the future

This fundamental regulatory disruption will make crypto much less attractive to investors. However, there are a few notable players that are shaping the industry into the new form it will take tomorrow.

With increased…