Bitcoin’s Price is Affected by US Regulation & Lack of Crypto Legal Clarity
Is the Price of Bitcoin At Risk of Changing with New Regulations by the United States?
With so many changes around the crypto and fiat industry around the world, the United States manages to impact the global economy substantial. With that in mind, there are many crypto enthusiasts that are anxious over the upcoming regulations may stir up price changes in Bitcoin and other tokens. Volatility has always been a concern in cryptocurrency, specifically with Bitcoin, though regulation can make a big change in the way that it maintains its price. However, it is important to look into the actual difference that the US regulations could make globally, both inside and outside of crypto.
The US’s Impact on the Global Economy
To understand how these regulations can change the world’s usage and value of Bitcoin, consumers need to first look towards how the United States changes the economy otherwise. It is no secret that the US is a powerful force in every country, driving the prices in many areas of the world. One trend with consumers in the US has the power to shift the focus on the whole world, due to their huge economy.
Many experts say that the US has enough power to help an industry thrive or be completely eradicated, but it also needs the other economies to thrive, due to creation costs and other factors. The US has many companies that work out of other countries, and the global economy is essentially synonymous with the US’s economical success.
How Does This Power Impact Bitcoin?
Given the track record that the USA has with economic change, there is a major opportunity for the US to enhance and stimulate the Bitcoin market. Major areas like Silicon Valley and Chicago have already take steps to incorporate crypto and blockchain technology. However, as impactful as these areas are, there is still plenty of change in the air as the government establishes regulations. However, these new regulations have investors worried that Bitcoin will not have the same opportunity to grow this way.
Right now, about 18,000,000 people in the US own some amount of Bitcoin, and it will primarily be up to them to demonstrate how necessary Bitcoin is. With more trading and purchases involving crypto, there is a chance that these millions of consumers could regulate the economy of the whole world.
How Else Could Bitcoin’s Price Vary?
Even though regulation is a major way that Bitcoin’s price and acceptance can change, there are plenty of other factors. These are the same causes in the stock market as well, but there are four main ways that prices typically change with the value of Bitcoin. Though regulation is definitely one of those factors, the other three are:
When Bitcoin is in high demand, more consumers purchase it. This causes value to rise, since it is a desirable investment. However, if consumers decide to stop purchasing it, the price plummets, making it a great time to buy but a terrible time to sell, since it causes the price to crash.
Gradual supply is the best way to offer these tokens. Consumers need to constantly look out for newly mined tokens to make a purchase. If they all became available in a single day, they could potentially be bought out with nothing left, causing a price crash. However, by slowly spreading through the market, the price is maintained.
Publicity is important to the sale of any product, especially Bitcoin. With more businesses accepting Bitcoin, consumers become more interested in its value and use, making it a popular way to shop and invest. If the publicity is negative, consumers fall away and avoid the problems that they could face with Bitcoin instead.
What Happens Now?
The United States government has a responsibility and an opportunity with Bitcoin, since it can so easily sway the worldwide economy. The right regulations could help crypto to become more expansive and usable across the market, though discouragement of using Bitcoin could kill the market. Credit card companies and some financial institutions have already decided to even reject the purchase of bitcoin, but investors should wait and see what regulations are established.