How regulations could affect bitcoin pricing
The U.S. dollar has dominated the other currencies for many years. That’s why most people trade it for Bitcoin.
Bitcoin regulation has dominated the media for a while. The U.S. government has met representatives from the crypto industry. In the U.K., regulators have met companies in the cryptocurrency industry to determine the framework to operate. Consequently, some companies have suspended their Bitcoin operations, waiting for further notice. That’s because of the current opaque regulatory issues regarding cryptocurrencies.
However, uncertain governments have not hindered people from using Bitcoin trading software to purchase and sell this digital currency. Even with its unknown future, Bitcoin price has also continued to increase over the last months. However, the regulatory issues that governments are discussing with industry players have left many wondering what the price of this cryptocurrency will be. Since Bitcoin operates on an international level, regulatory decisions that countries make will affect its price. And the question that many investors have is whether this impact will hurt or help its value.
Bitcoin price has fluctuated over the years. For instance, this virtual currency was in the doldrums in 2013. But what caused this? Well, Bitcoin mining was becoming more complex. And this could have caused a price decline. Also, the inability of some crypto exchanges to process withdrawals caused the price drop. Such factors, combined with negative Bitcoin news, can affect its price adversely. If you want to know more about bitcoin, then you can visit Crypto Engine App.
However, Bitcoin embarked on a stable rise after that. And its rise has been relatively steady, hitting its highest price in late 2020 and early 2021. Although volatility is a concern for most people wanting to invest in Bitcoin, price swings are sometimes minimal.
Overall, Bitcoin’s value has been increasing. And this is has prompted more people to invest in this virtual currency. A higher Bitcoin price brings it more mainstream attention. And with the growing Bitcoin economy, more banks are entering the crypto world.
The Meaning of Closer Ties
Some experts argue that close alignment with the government could be an anathema, though it might well serve Bitcoin. Some libertarians attracted to this digital currency feel motivated to invest in Bitcoin because it provides a financial system with more freedom. However, concerns about governments’ control for fiat money have left many people suspicious about economic controllers.
Satoshi Nakamoto’s white paper argues that Bitcoin’s purpose was to address people’s suspicion in the traditional financial system. The aim was to develop a payment system that no government or central bank could interfere with or control.
Internet commerce is heavily reliant or exclusively dependent on financial institutions that provide third-party services for processing electronic payments. Although this system functions for most transactions, it has inherent weaknesses because it’s a trust-based model.
Today, individuals trust technology than financial service companies or banks. But Bitcoin isn’t separate from the traditional finance system. That’s because people value Bitcoin since they can trade it for fiat money. Companies that operate Bitcoin businesses interface with conventional third parties like banks. Thus, Bitcoin is almost inseparable from the traditional financial system.
And when many investors share this sentiment, Bitcoin’s price will go down because they may sell their crypto holding due to a lack of faith in it. However, this could be due to the consensus that the public can’t trust banks.
The U.S. dollar has dominated the other currencies for many years. That’s why most people trade it for Bitcoin. Consequently, the U.S. government’s regulations can affect Bitcoin pricing. Nevertheless, financial regulators worldwide are taking precautions and taking time to gather sufficient data before deciding how to regulate Bitcoin. That’s because their action could spark a reaction that will affect the crypto market and even the traditional financial system.