As they put it, nothing is constant in this world but change. While some are sceptical about government regulations in the crypto market, some have learned to become open-minded about this recent development. It is high time to make some changes in crypto operations to better respond to new challenges. Here are some reasons why crypto regulation is not that bad after all.
Imposing consumer protection
Crypto trading, like any other investment, is not immune to fraudulent activities. Investors can only rely on the prices being floated on the platform. They embrace the risk of buying coins from a stranger that is selling the same at a price. As to whether the coins will have value over some time, it would require extra diligence to scrutinize the reputation of the cryptocurrency. Otherwise, you might be investing in a bubble waiting to explode anytime soon.
There are many faces of the infamous crypto queen preying on innocent investors. What they would do is introduce a crypto coin in the market. Then, they would build on the cryptocurrency to garner more and more investment. Once they have reached the desired amount, they would disappear with the pot of money, leaving the investors with worthless coins. There is a need to be vigilant in choosing the virtual currency where you intend to pour your funds.
A background check of the crypto coins would come in handy. Whether or not the currency is legitimate, you will need more than to look at its face value. You will need to test the credibility of the promoters, the reasonableness of returns and promotions, and the practicality of the business model and documentation. Passing through these tests with flying colours would give you the green light to pursue your investment.
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Setting reasonable standards
Another great thing about regulation is the opportunity to set better standards. It is noteworthy that risks are inevitable in a deregulated environment. For this reason alone, it would be a delightful change to impose regulations that would ease, if not ultimately eliminate, risks. The challenge is to come up with preventive and corrective measures to successfully control the market. Be that as it may, regulation should only go as far as resolving the issues and concerns that triggered the risks. This will help the government avoid bumping into a slippery slope.
It can be recalled that several countries have imposed regulation of cryptocurrencies and crypto exchanges after exposure of the system's vulnerability. For instance, Japan has only decided to regulate the operation of crypto trading platforms after an attack by hackers. The same incident has also brought the United Kingdom to require registration of these crypto exchanges.
What makes standards favourable is the reasonable expectation of credibility on cryptocurrency and crypto exchange developers. Compliance with these standards would ensure that only reputable players and playfields could enter the market. This is imperative to keeping the crypto market a reasonable option for investment.
Opening new opportunities
If cryptocurrencies and crypto trading platforms provide manageable risks, they will be able to compete toe to toe with other investment products in the traditional financial market. It is an opportunity to take the competition up a notch. It would attract investors from all walks of life, starting from the regular people envisioned by the founder of Bitcoin to professional investors.
The door would also come swinging open to more and more developers of cryptocurrencies. It would provide more options in the portfolio which would mean more internal competition. As you know, competition drives the free market to reach better prices. And this would redound to the benefit of investors.
More than anything else, it is an opportunity for the market to evolve. The only way for the crypto market to evolve is to change. Regulation would play an essential role in conquering new waters for cryptocurrencies. This is the best time to make the most of the momentum when investors keep on coming.
Regulation is not bad at all when the intention is to better the market, particularly the protection of consumers, setting reasonable standards, and seizing new opportunities.