TBH after what happened in the last couple of days, investors will remain fearful of keeping their funds in custodial exchanges. If 16B worth of exchange can fall to zero overnight, this can happen with other exchanges too. None of them show transparency about their reserve so investors won't trust centralized exchange until they make their balance sheet public.
And why don't they? In the interest of making Bitcoin a "safer asset to buy" for retail investors, more hands means the Bitcoin price shoots up for the long term. Investors seem to like regulation for this very reason. Busts like this erode confidence in crypto and people tend to drop them like a hot potato, and down the price goes along with it.
Transparent balance sheets would totally prevent any creative accounting.
After seeing what happens with Luna, UST, and FTX I think satoshi was wise enough to keep himself anonymous. When people know what you have they try to find your weakness and broke you. CZ knew FTX doesn't have the reserve they were talking about so he takes advantage. If CZ doesn't know that this may never happen.
Retail investors are the blood cell of the whole bitcoin ecosystem. Without them, bitcoin will be a ball for big players who will constantly battle against one another to take them down. Regulation may give them safety and assurance that someone will not try to gamble with their money.
