What's going on?

Well, it was good while it lasted: meeting minutes released on Thursday showed that the Bank of England (BoE) is calling for tougher crypto regulation.

What does this mean?

The entire crypto market is big and growing fast: it�s now worth $1.7 trillion, having grown tenfold between the start of 2020 and the end of 2021. And while that�s still a fraction of the $469 trillion sloshing around the global financial system as a whole, it�s still bigger than the $1.2 trillion subprime mortgage market that triggered the global financial crisis.

The BoE has noticed. In a meeting last week, the central bank said there should be tougher regulation in the UK and globally. As for what that looks like, it�s talking about requiring financial firms that invest in cryptocurrencies to hold significantly more cash than they do now, just in case everything goes south.

 

Why should I care?

For markets: Bitcoin bucks.
The BoE�s not the only one concerned: the US government announced earlier this month that it�s looking into ways to better protect customers from the risks of trading crypto. But it�s far from turning its back on the digital space: it�s been thinking of ways to make the US a leader in the crypto world, potentially by launching a �digital dollar� backed by the real deal. That would expose a lot more Americans to crypto, which might explain why bitcoin has risen more than 10% since the news.

The bigger picture: VCs aren�t giving up.
Venture capital (VC) firms poured $32 billion into crypto startups last year, and it doesn�t look like the prospect of tighter regulation has put them off. Haun Ventures, for one, announced this week that it�s raised $1.5 billion to invest in firms specializing in the crypto space and web3. And there�s more where that came from: VC firms Electric Capital and Bain Capital Ventures raised $1 billion and $560 million for crypto-related investments earlier this month.