Why Crypto Regulation Is Good

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Why Crypto Regulation Is Good

Why Crypto Regulation is Good

Crypto is a controversial financial segment even though the number of investors has increased several folds over the years. However, beginners and novices consider stability is reciprocal to regulation when the market is highly volatile.

Allnodes business head Tally Greenberg said regulations may come up and stabilize the market as well as protect the investors amid many enthusiasts opposing the new regulation arguing it will simply hinder innovation in the segment.

Cryptocurrency is a decentralized segment and regulation may make it less decentralized. It means regulation may go against its core spirit. Its primary attraction is not being backed by any government or institution. It is completely independent.

However, some argue the regulation may help in the protection of investors and simultaneously prevent fraudulent activities in the segment. It will provide guidance and companies have innovated in the cryptocurrency economy.

The age of the crypto segment is slightly more than a decade and Bitcoin was the first cryptocurrency launched in 2009. Today, thousands of cryptocurrencies exist. It is largely unregulated and the debate to introduce new crypto regulation ignited last year. Policies are yet to be introduced.

Meanwhile, a couple of countries including the United States, China and India are thinking of introducing government-issued cryptocurrencies. The crypto market is highly volatile and speculative. These two features may continue even after a regulation emerges. This is the reason many experts suggest keeping investments in the crypto segment under five percent of the portfolios. It is never advised to invest too much while compromising the savings.

Some argue the regulation will be better for investors as they can enjoy more stability. Speculation can be minimized and this may lead to enhanced investor confidence. An influx of new investors can be witnessed as many avoid markets that are highly speculative.

It is claimed that investors may gain confidence with enhanced protection. A regulatory framework ensures asset protection. As of now, the protection of investors is weak compared to the securities markets.

Regulation will help in creating a safer ecosystem. It is true that crypto crime has increased tremendously in the past couple of years and scammers were able to steal crypto coins worth $14 billion in 2021.

It is always suggested to store the crypto coins in digital wallets, either hot wallets or cold wallets to overcome such stealing circumstances. Hot wallets are linked with the internet while cold wallets are basically offline wallets. Cold wallets are considered as safer.

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