To Crash or Not to Crash: How Will Regulation Affect Cryptocurrency in 2018?
The lack of regulation so far may have been a factor in Bitcoin and other cryptocurrencies growing from nothing to a half-a-trillion-dollar industry in less than a decade. Now however this explosion in value is being reviewed regulators around the world, as they weigh up options. Ranging from tighter regulatory oversight, to banning cryptocurrencies altogether.
Here are some of the ways regulation may affect cryptocurrencies in 2018.
Regulation in the headlines
News of forthcoming regulations in cryptocurrencies usually hits the price of cryptocurrencies immediately. In the last few months the US, South Korea, and China have considered potential new restrictions and bans. Cryptocurrencies will be a priority at March’s G20 summit.
Why regulation is necessary and inevitable
Governments have a few reasons for regulation. Firstly the cryptocurrency market is now worth hundreds of billions of dollars and the private nature of cryptocurrencies makes them a tempting tool for tax evaders. Governments don’t want to miss out on tax revenue.
Governments also want to protect their citizens. The cryptocurrency world has been described as the Wild West, and the people that get hurt most are regular people. Hacks and sophisticated scams are relatively easy to pull off with cryptocurrencies because of a lack of regulation, and hundreds of millions have been stolen so far. It’s the job of regulators to make sure people are protected.