Can Bitcoin Regulations Make Cryptocurrency Safer?
The rise in demand for cryptocurrencies and incredible volatility in their prices has caught the attention of regulators. Regulation of cryptocurrencies in the United States is complicated because no single federal authority is doing it.
The Commodity Futures Trading Commission regulates Bitcoin as it is considered a commodity. It's also considered taxable property by the Bitcoin futures exchange and the IRS. The traded funds come under the Securities and Exchange Commission (SEC).
The purchasing and selling of cryptocurrency with blockchain technology are extremely secure. However, the CFTC and SEC have issued several warnings regarding scams associated with cryptocurrency investments. Here’s what you need to know.
Bitcoin Regulations Changing the Market
According to some researchers, decentralization and anonymity are the main drivers of cryptocurrencies. So the lack of concentrated regulatory power is contrary to the idea of centralized regulation.
These are the reasons why cryptocurrencies lead to crimes such as money laundering and need to be regulated. If done properly, regulations can stabilize the market by reducing the risks for investors in the long run.
How Safe is Bitcoin Regulation for the Market
Bitcoin regulation can make the market much safer though it’s a risky investment. With protection for investors, the market is less likely to face as much manipulation from the outside.
This is considered a positive factor for people who intend to invest in cryptocurrency. Safer markets ensure more public confidence and elevation in prices over time.
Allowing Selecting Cryptocurrencies
With thousands of cryptocurrencies existing worldwide, most investors are only aware of a few of them. Since they don't have complete knowledge about the thousands of other virtual assets, a regulatory authority clearing cryptocurrency is needed. It can disclose all information about the performance of the digital assets, their potential, and underlying risks.
Risks Associated With Technology
With the proliferation of technology, professional financial advisors and information structures in cryptocurrency are required. That's how investors can gain better insight into the technological risks that come with cryptocurrencies to make an informed decision.
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