Saylor: Lack Of Regulatory Clarity Drives Crypto Market Volatility

Michael Saylor, the Founder and CEO of MicroStrategy shares his views on factors that he sees effecting the high volatility on the crypto market.

Saylor recently spoke with CNBC, and said that the lack of regulatory clarity, which allows irrational trading to happen, has a big effect in the volatility of crypto markets. He explained:

“The volatility is driven by the immaturity of the asset class. The lack of wash trading rules – you can buy and sell [cryptocurrency] within the same hour. I think that’s fairly immature.

I think 20x leverage on the off-shore exchanges, I think the Wild West of crypto derivatives, the cross-collateralization of altcoins into ETH / BTC through decentralized finance exchanges on a Saturday night through a very thin piece of liquidity on the 177th-biggest coin. All of those things are a recipe for volatility.”

While lack clarity on future regulations might drive up volatility at first, eventually it will bring down the price instability of crypto assets, which will bring the blue-chip investors to the crypto table, Saylor projects.

“The uncertainty about the regulatory environment because as regulation comes it has an impact on all these different crypto systems and they’re all cross-collateralized to each other. I’d be surprised if there wasn’t volatility. It comes with the territory. There are pros and cons.

I think the volatility will be dampened as the regulation progresses and that will encourage institutional adoption.”