Retail investors returning to crypto - UK government has other ideas

Retail investors returning to crypto - UK government has other ideas

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Retail is back in crypto and mom-and-pop investors are doing more to drive the market than even institutions. The crypto bull market looks to be squarely on track. However, the UK government is trying to prohibit and restrict citizens from trading.

Retail is back

According to a Bloomberg article, strategists from JP Morgan are saying that retail traders are back in the crypto market, and that not only are they back, but that there are more flows out of the smaller wallets than even from the institutional traders, after allowing for the flows from the Spot Bitcoin ETFs.

This is obviously more good news that will drive the crypto bull market. The mom-and-pop traders/investors are probably aware that all is not right with economies. Even though they probably do not understand the impending economic misery that is about to befall them, they can see the high prices and know that their currency is buying less.

Why retail is here

Retail investors will be aware that savings accounts or money in the bank, virtually their only possible source of returns, are making them a lot less than inflation. Therefore they need to try and make these returns elsewhere. Otherwise, what they have will continue to dwindle towards zero.

UK government cutting off all escape routes

One government that is not making this easy is that of the United Kingdom. Supposedly trying to become a global hub for crypto, the UK maintains a rigid compliance system that gives very few crypto companies the right to set up shop in the UK.

And why should they? Over recent months the UK has been busy trying to prohibit and restrict any crypto trading for its citizens. Even on Coinbase, one of the most regulated and compliant exchanges in the world, UK citizens are forced to jump through two hoops. 

No trading on Coinbase for most UK citizens

The first hoop is the one that seeks to catch all small retail investors and put them into the category of “Restricted Investor”. This category makes the investor agree that they will not invest more than 10% of their assets. The only other choice is for those who earn more than £100,000 per year, and these are classified as “High Net Worth Investors”.

This is a very similar arrangement for those who wish to invest in the stock market. If you are a small time investor you are barred from the playground of the big investors, AKA, the wealthy get richer and the poor are forced to stand by and look on.

The other hoop to be jumped through is that of proving that you are competent in the basics of trading. Perhaps this is not such a bad thing, until one realises that absolutely anybody is allowed into a casino, and is allowed to lose everything they have. 

The real reason for anti-crypto stance

There is only one reason that the UK government is trying so hard to prevent its citizens buying and selling crypto, and that is that the banks will be applying pressure on the politicians.

Banks will no doubt have understood by now that if crypto is allowed to continue they will shortly be going out of business. In this new digital world the banks are becoming practically obsolete, and if citizens were not forced by law to use them in order to pay their bills and such, there would be no use for them, at least for these everyday transactions.

Simply having a mobile phone with certain apps will allow citizens to carry out all the transactions they need to, without having to go via their bank, which currently has the power to veto any transaction, and seemingly the power to cut off anybody from their money if they see fit to do so.

People shouldn’t be serving the banks

The banks are fighting back. There is a quote that is attributed to Gandhi, and it goes: “First they ignore you, then they laugh at you, then they attack you, then you win”. We are obviously in the attack phase here, as the banks have woken up in a fright, and are doing their damnedest to encourage suppression, prohibition, and a heavy regulatory strait jacket for crypto.

It's to be wondered how we arrived at this state where banks have now become the masters of the people, and that the people are to serve the banks, or face sanctions, which might include having your account closed and not being able to open another in any other bank, as was the recent case for Nigel Farage, and for many thousands of others.

If the people realise that they are ones with the power, and not the banks, this financial revolution can be over very quickly. That said, given the sleepy and uninterested state of most Western populations, this struggle is probably going to go on for a long time yet.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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