Last year we saw great swings in the values of cryptocurrencies. Despite the fluctuation trend was mostly upward, there were key events that led to an enormous downward trajectory.
Some of the reasons why that happened can be because of the deflationary nature of currencies and because most of the coins were still seen as an investment for a fast gain. But here we are going to discuss the external factors such as politics and government regulations.
The biggest jump in value for cryptocurrencies was in an unregulated environment. Regulators tried, for a long time to stay as distant as possible from the crypto action and thus prices continuously increased. But in 2017 some regulatory bodies believed it is best to take make their first moves towards regulating the market. They wanted to frame a system that was created without borders and restrictions and that sounded a little scary. But, with the growing interest in ICO funding, many blockchain companies gained incredible amounts of money which were a breaking point for the regulators. In 2017 blockchain based companies gathered more than $4 billion in funding.
More regulations won’t necessarily be an end to ICOs or the end of cryptocurrencies. If nothing more, it will probably bring an end to scam projects, malicious activities related to cryptocurrencies and frauds. It can mean that investors will be motivated and surer and will feel more secure and protected when investing.
As for the prices value of cryptocurrencies, regulation will surely bring many downward movements until the market and users realize that not all is bad, but it will eventually stabilize.
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