Is cryptocurrency regulation good or bad for investors? This is just one of the few questions arising from conventional investors and other crypto advocates.
Let us elaborate more about this topic in this article.
By the fact that Bitcoin and other common ICO issued tokens are decentralised, the supply of these digital assets is not determined by the government or central authority. Cryptocurrency transactions, through the blockchain, can be made, validated, as well as documented in the public ledger in the absence of intrusion from a third party.
Should investors embrace and accept cryptocurrency regulation?
According to various cryptocurrency experts and analysts, investors must accept and embrace crypto regulation. Regulation could add more sustainability to the digital tokens in the horrendously volatile cryptocurrency market. Tally Greenberg, business development head at Allnodes, emphasises that crypto regulation will occur or must happen in the future, for it will help stabilise the crypto market. It can also provide further security for investors, making crypto regulation an advantage for many.
Cryptocurrency regulation is a controversial discussion. A lot of crypto enthusiasts also argue about it. As a crypto investor or trader, you should be aware of the things or some necessary information that might impact the digital token’s future, for it will affect your investing or trading plans and decisions and influence its future price. You can find valuable information related to cryptocurrency from the experts at Cryptona, who do thorough research about the crypto market’s news, trends, updates, and more.
Other cryptocurrency enthusiasts are not in favour of cryptocurrency regulation. They point out that regulation can hamper innovation which contradicts the nature of cryptocurrency, being decentralised. Institutions and government authorities support traditional currencies. Crypto regulation will lose the digital asset’s decentralised feature.
Advantages of Cryptocurrency Regulation
From the experts’ point of view, the majority of them said that crypto regulation is beneficial for many investors. These advantages include:
- Add more security to the cryptocurrency’s ecosystem
SEC chair Gary Gensler defined cryptocurrency as a “Wild West” since there’s no regulation in the industry. These digital assets are more prone to hacks, rug pulls, fraudulent activities, scams, and market manipulations due to their shortcomings in laws and policies. Cryptocurrency, by its decentralised nature, doesn’t have similar standards to other financial markets. Crimes in crypto are also prevalent in many instances. Experts are pointing out that new risks to scams and frauds are now arising in the crypto space.
Cryptocurrency regulation plays a major role in providing more security in the crypto market. With the government’s involvement, laws and policies will be applied to the digital assets, which also add a substantial level to their security.
- Maximise investors’ trust and protection
Investors don’t have sufficient protection in the cryptocurrency market, given how hacking could easily occur in digital assets. This happens because of a lack of regulation in the crypto industry. Some established cryptocurrency exchanges such as Coinbase adhere to the policies of federal and state regulators. However, these exchanges are not regulated like public stock exchanges and other conventional financial trading systems. Since cryptocurrencies lack regulation, this is the reason why some traders and investors doubt the digital token’s security and credibility.
Crypto regulation will result in a more secure market, which drives many investors to trust and invest in digital assets. This will also lead the crypto industry to grow in the future.
- Increase stability
Regulation of digital assets provides flourishing development for the crypto industry. Speculation will be lessened among crypto tokens. Reduced speculation can add more credibility to the crypto assets, which can result in a maximised confidence in the investors. People’s perspective on cryptocurrency will be changed and many will promote more positive behaviour on how they treat digital assets. In the long haul, the number of crypto long-term investors will massively grow, as well as more would-be investors will adapt to the crypto world. According to many experts, the potential of the crypto assets will be unlocked and fully utilised when an appropriate regulatory framework is implemented.
In the long term, crypto regulation may have the potential to stabilise the market and alleviate the risks for crypto traders and investors, according to Tally Greenberg.
