4 Ways Regulation Can Affect The Price Of Cryptocurrencies

Many experts believe that the lack of regulation was a key factor why cryptocurrencies grew from 0 to a half a trillion dollar industry. This is why regulatory bodies are trying to join the party and help to create a stable crypto market. Others disagree and believe that no regulation should be placed upon cryptocurrencies. No matter on which side you might be on, here are some important ways how regulation can have a major impact on the price of all cryptocurrencies.

1. News

As you witnessed, headlines about regulation in the news usually have an immediate influence on the price of cryptocurrencies. If you remember well, South Korea and China were one of the first to consider regulation and even bans and restrictions. When the news hit everywhere, the price went down for more cryptocurrencies.

2. Is It Inevitable?

Governments have many reasons why they want to regulate cryptocurrencies. First and foremost, the entire crypto market is worth hundreds of billions of dollars, and because of their ability to be private and secure, many find a way to evade taxes. Governments will always use any chance they have for tax revenue. Governments also believe that in this way they will protect their citizens from hack attacks and scams.

3. Risky Environment

Many professional investors and traders don’t take the chance to invest in cryptocurrencies because of their nature and current environment situation. If there is a legal framework, investors will be motivated to start investing a lot. When this happens, the price of cryptocurrencies will rise since the demand will rise as well if big players join in.

4. Dangers

This year with all of the tax rumors, it’s expected to be a roller coaster for all crypto enthusiasts and long-term holders and users. If any rumors get out about further cryptocurrency or ICO regulation, it can bring down the values but only short-term.