Bitcoin Forum

The regulation of cryptocurrency in various countries is becoming more and more stringent.Regulatory clarity will slow down Bitcoin's volatility。 How do you think of it?

In the good way only.

People think that regulation happening will shut down crypto and that everything is a government conspiracy. Point is that human mind works like that and always thinks of worse possible outcomes. Regulation is for our own good, but nobody understands this. With a regulation on the number of altcoin projects coming up there will be pressure to actually develop the project and not just steal the investors money and run away - what happens with 99% of altcoins in the last four years.

The stock market is regulated and runs for fixed hours. Is it volatile? Of course it is.

Then how can the bitcoin market not be volatile if that was regulated when it runs 24x7?

Use your common sense, the market lives on volatility, because without it there is no market to trade on.

Actually I don’t see a direct dependence of volatility on regulation.Talking about decreasing of volatility, it is said that when an ETF on assets appears it becomes less volatile. For,example, when there was no ETF on Gold it was also very volatile, but now not really. What comes to regulation, authorities can restrict mining or ban centralised exchanges and it will put pressure on price.

I don't think this will happen. The price volatility of a cryptocurrency, in my opinion, is not directly related to the degree of its regulation by states. Reasonable regulation of cryptocurrency leads to increased liquidity and distribution around the world. However, the price of a cryptocurrency will still depend only on the level of supply and demand for it.

No.
There's no regulation that can slow down bitcoin's volatility. It's the major feature that bitcoin has and even if there will be a lot of regulations worldwide that tries to slow it down, they just can't.

There are different groups that invests in BTC and one of them are those that waited for regulations and infrastructures. A lot of the institutions added BTC to their assets because of those developments. There's that one part of the demand.

Regulation has no impact to the bitcoin's volatility, the volatility caused by the demand and supply in the market. it has nothing to do with the regulation. The regulation just made the demand will be less as exchange sites will be more strict to evaluating its users to be able to use its service. That means if that was only decreasing the demand as people can't use some exchange sites anymore. I think that you're not understand about that but what you're saying was not also totally wrong at all. It was giving a small impact but it's not so big and makes bitcoin less volatile. Did you see the bitcoin market? you must see that again. It's very volatile at this moment.

The more stringent or the more stringent cryptocurrency regulations are in demand in every country? Unless you live in a country where crypto is a threat at all. So far, crypto has been given fresh space to operate. Except in countries like India, Nigeria and etc. which still classify Bitcoin as a threat to fiat money.
If Bitcoin's volatility is constrained, we should see a lot of constraints on bitcoin's growth. But in fact not at all.

that's rights there are no regulations that slow down the volatility of bitcoin ,the advantages still operate freely for us and are not bound by any regulations, well unless traded in order to replace fiat in visible reality there have been regulations for it in my country but also no restrictions on digital investment cyrpto ,news in some countries is said to be a threat but the majority of people get profit and will stay on digital freedom

I do not know, could you tell us why you think that way? What has to do the possible regulation of bitcoin and other coins with the volatility and a possible decrease of it?

You are forgetting the whales of this market are holding bitcoins which means that if we get more regulation and we get more institutional and retail investors in the market and the price goes up the whales still have the same number of bitcoin and can still move the market as they please, so not much if anything will change with more regulation and the possible increase in the influx of investors.

Most Important Point - Why Regulatory Clarity Can Slow Bitcoin Volatility?

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My logic says that if the regulations are clearer, it will make bitcoin easier for everyone from various countries to access, right?. For example, in my country (Indonesia), Bitcoin and other cryptocurrencies have been regulated to make it easier for our citizens to access them without fear (because it is already regulated).

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Looks like this discussion is leading to bitcoin, BTW, we have our own discussion place regarding bitcoin, you can move your topic here: https://bitcointalk.org/index.php?board=1.0

In fact, when there are bad news for the market it shows how volatile bitcoin is and dropping as quick as it can. And that's very usual for bitcoin because it's the true nature of it.
By being volatile, you get to have the profitability on it and despite it's high risk and we knew it, we're still holding it because it's very rewarding.

Indeed. Moreover, "bad news" often arrive exactly from regulatory bodies of different countries. The Bitcoin ban or extremely high taxes suddenly imposed on trading activities usually have a negative impact on the BTC price. But fortunately, these hostile actions are not so perceptible on an international scale.

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Absolutely not. Unlike the national stock market, the global cryptocurrency market is not regulated and not backed by one country or government. They cannot stop trading at any time and turn off the switch even if the price of the coin is quickly halved (or doubled). This market has always been volatile and will be manipulated in the future, but there are already many independent players here.

Hmm, I have doubts that it can slow down bitcoin's volatility, I mean the market is open 24 hours 7 days a week so it's hard to control that bigger market.

Maybe what regulatory body wanted is not to control the prices volatility but to somewhat slow down the scams and the rampant hacks that is going on. For instance if a exchange is hack then they would rule that they are responsible and refunds those users who have lost their money.

Crypto will never become stable. The volatility will always there forever. Some people have been mentioning the correct point about this. Take a look at forex or even stock market. The gold was not even stable. It seems like you need to learn more about that. The economy 101 was the point. You must see the reality rather than pointing out about your opinion which doesn't match with the reality in the market. As long as there will always be people willing to buy or sell and it will never become stable like fiat. Bitcoin was store of value at the same time it has another functionality as a payment system.

The regulation will be affecting the the users to use bitcoin. It will give no impact to the price. You meant regulation can reduce the volatility or slow down and it's really wrong.

Actually, crypto is one of the most risky markets compared to stock market or any other. Of course, there are different instruments and stocks of small companies that can be even risky than some coins in the crypto market, but it is still the most risky one and mostly because of its volatility. I don't think that it will become stable one day. If regularity increases, it will only hold investors back.

The only way regulations can slow down volatility in bitcoin is if the regulators will be the ones fixing and controlling the price of bitcoin. If they are not then it can not slow anything down. We should not be scared about regulations for bitcoin. It will not cause it any harm. If bitcoin has come to this point of acceptance through the years, there is little or nothing anyone can do to successfully destroy it.

I do not think that the regulators can control the price of bitcoin as the price can go to any price without them knowing. Sometimes, the price seems stagnant and not moves too high or low but in the next hours, the price can change the direction. Even if we do not have to be scared of the regulations, the government can use strict rules for the crypto user, and we can not do anything except follow their rule and try not to break it. Hopefully, after what happened to some countries that already accept crypto, that will change our government's mind and they will follow to accept crypto as the other countries.

The more Bitcoin arrives in the mainstream, the less volatility is also observed. Volatility has already decreased significantly in recent years, if you compare it with the early days of Bitcoin.
Regulation will certainly stabilize this as well. However, in my opinion, Bitcoin will always be more volatile than other asset classes, simply because the market can never be completely regulated. The non-regulated part, can always lead to a jerky high volatility.

if it's for a better future of crypto, I will support it. reducing bitcoin volatility is also good for making the market stronger. so this is not a problem, but an opportunity for crypto to reach more. people will start thinking bitcoin to be a better store of value asset than Gold. less volatility, meaning less risk to dump. so this is what people really expect.

Risk is there in all speculative asset classes. Stock markets can be very risky if you are not doing research on the company that you are buying. Volatility is the essence of profit in any speculative asset. These things run the market and the market would not be alive and kicking if there was zero volatility. Moreover if you check Bitcoin volatility over the years it has remained in <15% over long period and an average of 5% over short periods.

Now if you go back to 2009 and then ask price volatility from that range, then of course the price has risen a lot but that percentage will not be reinstated in the next few years.

There is regulation in the stock market, does that hold investors back? No. It only make more investors invest because now they know that there will be legal consequences for the companies if they go for a silent takeover, but this is not so in crypto where turning into a bankrupt state or hostile takeovers are very common.

I do not think so, regulatory clarity for cryptocurrencies may lead to increased adoption of Bitcoin around the world, but it will not necessarily stop price fluctuations. There are many factors that control the price of Bitcoin and not regulation is one of them. Perhaps if the full adoption of Bitcoin occurs in the future, there will be action by governments in this case To make the price of Bitcoin more stable.

It is not surprising to see the regulators because they do not want something that they can not control available in their country. I think it is about how they can discuss crypto with the government and the people, so hopefully, there will be a win-win solution for both the government and the people. So if your country does not have strict rules about crypto, you should feel lucky because you can use crypto without being afraid of the regulations from your government.

Yes, if you meant regulated exchanges. One reason why this crazy volatility persists in the crypto market is because of the market manipulation. If the exchanges are highly regulated, market manipulation will be more difficult. There will be less wash trading, fake trading, etc.

Another reason is about the certainty/risk. There will be no flash crash because of country x banning crypto, since its status is now clear.

I have always been a proponent of clarity and transparency in crypto. It would accelerate mainstream adoption and less government disruptions. People are just scared of losing money to some shady project, especially in DeFi where rug pulls are no more news. The earlier the crypto community realizes accountability aids adoption, the better for everyone

Bitcoin's volatility and bitcoin's growth are not same in any sense. The threat of regulatory is not new on crypto space but I have been kept hearing it ever since I enter here but at the same time, bitcoin has grown up more than 200x (the min growth rate since I joined crypto space). I mean that no one could stop governments from going for regulations still crypto space will keep evaluate among them as most of the times when governments do mention about cryptocurrencies for some reason which helps someone to know about cryptocurrencies and also ending up adopting cryptocurrencies somehow.

Overall, when governments plan up for regulating bitcoin or all cryptocurrencies, cryptocurrency users are finding some new method to bypass such restriction just for the reason of protecting their privacy and for ensuring their financial freedom. I believe privacy and financial freedom are basic rights of every human hence no regulation will last forever.

I seem to agree with this argument.  I think the more regulation of bitcoin becomes more restrictive, unnatural, loss of volatility could be a slower step than it is depending on what the user base expects, including price treat.  Maybe there will come a time when bitcoin becomes legal, people will remember about “volatility.  Even if a Bitcoin ETF is accepted, the speculative nature of more may come at the expense of usage and settlement.

Regulatory regulation of cryptocurrency, including cryptocurrency exchanges, is unlikely, in my opinion, to reduce the price volatility of cryptocurrency. This should not affect the formation of prices, since supply and demand in this market is formed on the basis of completely different criteria. So far, it has been noticed that the higher the price of a cryptocurrency, the more possible and its price volatility is manifested.

In fact, bitcoin regulations are still just a draft, many think countries have added more regulation points to make it transparent and widely operable but there is still too much ambiguity and direct comparison is still less detailed than the usual laws of other properties, so we're inclined to think that bitcoin's movements are uncorrelated and clearly inefficient between regulations, no delay due to regulations. However, once regulations are pushed to a higher level of granularity, meaning institutions have become conscious and firmly in control of bitcoin, the slow volatility is the result of this cycle.

Bitcoin was never designed to be in compliance with financial system that is controlling and abusing people money for centuries. If you go back and read satoshi whitepaper then it clearly state that its all about sending cash b/w two parties without any intermediary. Those who think crypto in compliance with regulations is still a crypto need to read satoshi whitepaper.

Bitcoin and other crypto's volatility is usually caused by less market movers better known as whales. Many of the institutional investors and big players in the traditional markets are not fully committed to enter since there are still uncertainties when it comes to regulations. They don't want that added risk.

Some strong regulation will definitely affect BTC volatility but now, if we look at the stock market, its volatility has grown dramatically for the past 2 years. And no regulation stops this growth.

Another non sense thing that im seeing it this day. Regulation has nothing to do with volatility. If cex will be fully regulated and it will not make bitcoin to be stable. People who are willing to buy that will always make the price of bitcoin will vary. It can't be dictated with the regulation. Bitcoin was an asset of freedom. Another commodity was not also stable even if that's already fully regulated. You're mentioning wrong statement about that.

Regulation will be only used to make sure the users who have been actively trading crypto will be safe from criminal activity like money laundering and another criminal act. I think that you must understand what means regulation for crypto correctly. The regulation can be implemented for the exchange site but it's not for crypto. 

Bitcoin will never become stable, but I think that what the OP is trying to find is if regulations will make bitcoin stable and I think this will not be the case, however there is a case to be made about bitcoin becoming more stable as adoption increases.

After all one of the reasons the price of bitcoin moves so much is that it is still relatively a small market compared to others, however if bitcoin keeps going up not only in price but also in adoption I think we will come to a point in which bitcoin will be more stable as at that point its main use will be as a currency and not as a speculative asset.

Don’t think that regulation of BTC will slow down its volatility. Think, quite the opposite, in fact. Adopting BTC and making it legal means of payment will only popularize BTC among people thus interest towards BTC will increase and the demand will increase as well. So volatility will also increase.

In my opinion, the price movement of cryptocurrencies is not directly related to the level of regulation of the countries. everything has no impact on the volatility of bitcoin, volatility due to supply and caused by market demand. it has absolutely nothing to do with regulation. The regulation has just been released, the demand will be less because the exchange sites will be more strict in evaluating their users to be able to use their services that is my own opinion.

yeah, I didn't see how it change the market volatility, well, if there is then that is good but I'd never think this could lead to stopping.
The price still moving in sideways, we'd come to bullish this time, and might it dump after. That is really how the market looks like but having such regulations will helps crypto adoption.

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@OP must have to take into consideration that crypto regulations won't change the feature of the market but instead, this could attract more investors and users, and this fuels Bitcoin acceptance as a mode of payment.

Regulation has not started yet. So you cant say that right now without proof backing your claim. If things become restricted then trading will decline. But is that what a government would usually want?

No - this is because every government wants to make money from the users who are under its control. Just like in the stock markets, the exchanges need to pay some fees to run a license, similarly there will be some sort of fees + taxation based on what you trade. This is exactly what the whole buzz about regulation will actually bring in, unlike the crazy conspiracy theories.

Stock markets are regulated, they are still volatile - how do you explain that? And since regulation has not started yet, people are only speculating every possible outcome without taking into account the feasibility of that outcome.

^ that my friends, is exactly how we humans end up creating bullshit about something that may be good for the future.