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- Regulations from China and now the USA has triggered anxiety and panic selling among crypto investors
- Regulations have started to build a divide among Bitcoin investors as two sides of the same coin arguing for their own merits
- Markets may suffer from another million being wiped off, or the bullish runs continue
After the Chinese crackdown on cryptocurrency, the US Treasury wants to up the ante with stricter regulations and policies anew. The Department has announced that transactions above $10k need to be reported to the IRS to avoid tax evasion by numerous investors. It will also stop money laundering and faulty transactions from taking place in the digital asset space. Bitcoin, the World’s most famous cryptocurrency, shed 25% of its value since hitting a peak of $61k just last month.
Regulation might divide the crypto fraternity
A group of experts and investors believe that regulation might kill competition and the actual motive of DeFi’s birth. A single authority does not claim over the mining and supply of cryptocurrency, which has worked wonders for a plethora of investors. Furthermore, this group also opines that cryptocurrency is here to stay and is currently forming the future of finance across all spheres.
The second group acknowledges the pitfalls of stricter regulation, but the same carried out in a mild form would not be detrimental at all. The difference between actual taxes paid and outstanding for US citizens in 2019 totaled $600 billion. Investors find cryptocurrency as a tax haven and compromise the financial health of the economy. Tax evasion would be halted as illicit terrorist activities funded through cryptocurrency will also stop.
Forward-looking regulations will bolster innovation
Soon Congress will receive the nod for a broader regulation of cryptocurrency and organizations issuing it. Regulations will benefit investors and promote a healthy environment for traders across all regimes and States. A regulatory moat is quintessential for new investors to develop trust before investing in any digital asset. Uninformed retail investments made headlines in the wake of the pandemic as the US government aims to lay regulatory provisions for all.
Are the markets going to suffer due to regulations?
Two superpowers of the World have expressed concerns over the legitimacy of the digital asset. The regulations may soon turn harsh with rampant exploitation of investor interest and concerns over price manipulation. Over $600 billion have already been wiped off from the market since the last. Not to forget Musk’s musings on Twitter that also contributed to the downfall.
The USA has always been seen as a friendly compatriot to cryptocurrency but it does seem that things are turning murkier. Global markets shedding value does not leave cryptocurrencies like Bitcoin and Ether out of the financial bracket. Time will best decide whether markets will face the brunt of such regulation or take its stride to achieve new highs.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
