There has been a lot of focus on increased regulations in the cryptocurrency market. This is a global matter, but these regulations could have a big impact on how we invest in cryptocurrency. One of the biggest selling factors of cryptocurrencies is that it is completely decentralised, but despite this, recently there has been a lot more government intervention, where they are dictating how we invest in cryptocurrencies.
So, just why do governments feel the need to step in? Well, there are a number of different reasons. They feel that stricter regulations would reduce consumer exploitations, something that the market is sadly very vulnerable to. The governments also feel like they could protect the price of cryptocurrencies from being so volatile. Finally, they are beginning to take notice of the number of ICOs that are being introduced into the market. It is no lie that people are incredibly wary of ICOs, and there are good reasons for this. A lo of them turn out to be threats to consumers, which can affect the economy in the long run. ICOs have been the main focus for some time, which has led the Securities and Exchange Commission to label them as a point of vulnerability, because of their high risk and volatility.
The IRS is trying to encourage taxpayers to look at their holding like property, which will mean that they are taxable. This is unlikely to change any time soon. Although the increased regulations are worldwide, certain states in America have started passing their own legislation; however, if enough states promote cryptocurrencies, the federal government is likely to take more regulatory action.
So how does this affect how we invest in cryptocurrencies? At the moment, without the regulations, you are pretty much free to do what you want with regards to investing. It also means that currently, anyone can release ICOs; yet the CFTC and SEC are constantly on the lookout for threats to the public and any scams. They hope that increased regulations will bring charges against those people who are trying to exploit the system.
So, if the market becomes more regulated and mainstream, they will become less of a profit, and investment opportunity, and more of a veritable payment Bitcoin. Only time will tell how it really does affect the way we invest, but it will definitely be interesting to watch.