Impact of Government Regulations on Crypto Prices

[Suba]

I often hear many countries make rules about crypto from crypto regulation, prohibition, taxation, to crypto advertising. The United States (US) often shows negative sentiments on cryptocurrencies, even this US government policy often crashes crypto prices. As a crypto lover I often ask myself, Why can government regulations make crypto prices fluctuate?. Here are some of the arguments I put together:
1. Governments can regulate crypto prices through buying and selling in global markets.
2. The government can apply high fees to convert to local money, or apply high tax rates so that it will reduce public enthusiasm for crypto.
3. The government prohibits crypto ownership and trading so that there is no crypto circulation in its territory.
There is also another opinion that government regulations have no impact on cryptocurrency prices, nor will government regulations make crypto lovers leave them. Of course, government regulations that do not benefit crypto lovers will make crypto trade move to other countries.

 

[Jasz]

The world of cryptocurrencies has often been called a Wild West, and it's not hard to see why. Cryptocurrencies are digital assets that aren't governed by any central banking system, and they can be traded in a decentralized fashion. However, some countries now see the need to regulate it.

Although, Crypto prices are largely determined by supply and demand, there are other factors such as perceived value and the cost of mining that may come into play as well, government policies as well have become alarming recently.

Many people have likened trading crypto to gambling—and some even say it's more akin to playing the stock market than investing in it—but either way, these fluctuations mean it can be very difficult for someone who doesn't know what they're doing to do anything but lose money when buying or selling crypto.

Some governments are starting to take notice of cryptocurrencies and consider regulating them. Japan was one of the first countries to start regulating exchanges on which cryptocurrencies are traded. These regulations require companies that trade cryptocurrency to register with Japan's Financial Services Agency (FSA) and follow certain rules designed to protect consumers from fraud and theft in the digital currency space, China also. This actions has and still affecting the existence of crypto in digital space.