Bitcoin: how regulation could blow up the crypto market

If in 2017/2018, the previous bull run (bull market) of Bitcoin had mainly been led by retail investors, that of 2021 saw its first very large investments by multinational companiesas You’re here Where MicroStrategy. But, as we will see from the NYDIGit would however lack the clarity on the side of the regulation crypto-assets before institutional investors massively explored Bitcoin and its ilk.

Some regulatory clarity for Bitcoin?

Regulators have been promising us a specific regulatory framework to the new asset class of cryptocurrencies. Some, like the MiCA Law issue in the European Union, are really not desirable.

However, this regulation would be the long-awaited element for the (very) large portfolios to start invest massively in digital assets. It is a report released at the end of this month of June 2022 that tells us confirmed.

Produced between September 30, 2011 and March 31, 2022 by the New York Digital Investment Group (NYDIG), this report entitled “ Quantifying the benefits of regulatory clarity » identifies the reactions institutions to regulatory decisions taken across the planet. Thus, the results are without appeal:

“Increasing regulatory clarity is beneficial to the price of Bitcoin. »

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China is the only exception to the BTC regulation/valuation duo

As can be seen from the chart below, whether for the Americas, Europe or Asia, Bitcoin prices do indeed tend to to climb after the announcement of clarifications/improvements of the regulatory framework on digital assets.

Apart in Chinawhere the regulation prohibitive leaves almost no room for bitcoin. Its various and (a)varied bans and prohibitions even have the very unfortunate tendency to make panic the market down. At least at short term (a few days/weeks).

Average BTC price performance after regulatory announcements. – Source: nydig.com

The regulatory events identified may concern both the taxation cryptos, their status as a financial asset, surveillance transactions, as well as legal obligations digital asset service providers (PSAN).

“The implication is that regulatory clarity – and although the latter is not always perfect – is appreciated by investors. »

In addition to resorting to a clear view on the side of the laws surrounding crypto-assets, institutional investors would like to have a tool to bet heavily on Bitcoin. According to a survey carried out last April by the Nasdaq stock exchange, financial advisors would look forward to the green light for a BTC spot ETFto invest the funds of their wealthy clients.

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