Regulation in the cryptocurrency market is something of a complex and controversial topic. For many owners of cryptocurrency, the lack of regulation has been a driving factor in its attractiveness. However, the lack of regulation also makes it harder to manage the flow of valuable commodities.
Cryptocurrency’s absence of regulation also makes it a source of great concern for some governments and currencies attempting to cut down on dangerous trading practices. China recently banned all cryptocurrency transactions in September, announcing it would now consider any transactions associated with cryptocurrency to be illicit in nature. Yet at the same time, Bitcoin’s value has gone over the $50,000 mark multiple times throughout September, though it dropped to around $40k, following China’s announcement.
Commenting on the complex market environment, Elon Musk noted that global governments shouldn’t be attempting to regulate cryptocurrency at all. Musk argued that regulating the cryptocurrency market could cause the proliferation of digital currency to slow significantly. When asked about the input the US government should have in Bitcoin, Musk once again recommended against the government’s involvement.
Dealing with Cryptocurrency Regulation Issues
Elon’s recommendations on avoiding regulation in the cryptocurrency market have risen at a time when public figures are examining the anti-fragility that comes with investment in solutions like Bitcoin. There’s a lot of conversation right now about whether the system should be shut down if it became too successful. Such statements have been issued by billionaires like Ray Dalio, who says he believes governments will be able to shut down Bitcoin.
Elon’s commentary on the marketplace indicates a deeper understanding of the nature of cryptocurrency. He notes that in a lot of ways, cryptocurrency is focused on reducing the power of centralized governments – something that the government is clearly not going to like. Musk is an owner of Bitcoin himself and keeps the cryptocurrency as a reserve asset for his companies. Commenting on the decision of China to shut down Bitcoin entirely, or attempt to at least ban transactions, Musk noted that he believes the actions of the central bank are based on the generation issues that China is currently having with electricity production.
Much of southern China is struggling with high power outages because demand for power is higher than expected. For those who aren’t invested in Bitcoin yet, or those considering moving into the cryptocurrency market, Bitcoin is also only just one option. Though it has the most potential in the eyes of a majority of holders. Elon Musk continues to invest significantly in the Bitcoin environment, as do a lot of high investors. Earlier in 2021, Musk even purchased over $1.5 billion worth of Bitcoin but has also shown some uncertainty with cryptocurrency. For instance, the Tesla company has leapt back and forward between accepting and halting the use of Bitcoin for Tesla payments.
Is It Really Possible to Stop Bitcoin?
Ultimately, as Elon Musk noted himself, it’s difficult to envision a situation where it will be possible for any government or bank to simply shut bitcoin down without also shutting down the use of the internet. However, the reality is that a lack of regulation is causing some significant problems with how we bring cryptocurrency into the everyday market. If people want to be able to use their crypto holdings as everyday currency, to purchase items that they want in their lives, then there needs to be some regulation to do this. Some leaders are even beginning to suggest that without regulation a future isn’t possible for cryptocurrency.
The SEC Chair Gensler said he doesn’t believe there’s a future for a currency that includes thousands of private forms of money. Additionally, some companies have begun to change their approach to the crypto market. Coinbase gave up on its lending program after the US SEC began threatening to sue the company for the product. For those learning how to trade Bitcoin in the UK, there’s still a lot of scope for growth.
Bitcoin is still the largest cryptocurrency by market cap in the world. Additionally, although the announcements from China have had a temporary impact on the Bitcoin value, the worth of the coin increased pretty rapidly again following the dust settling from the big announcement. Concerns around cryptocurrency right now could even be an opportunity for some people to get involved in the prices start to drop around market concerns. However, like any investment, it’s important to be prepared for both sides of the potential outcome of a crypto investment in the months and years ahead.