A new report has that news stories about cryptocurrency regulation affect the price of Bitcoin and other cryptos. This might seem obvious to cryptocurrency watchers. However, what’s interesting is what the report found about the different ways that such news impacts prices. Notably, news stories about limiting or banning cryptocurrencies tend to have the effect of lowering prices. In contrast, news stories about creating new cryptocurrency regulations tend to cause prices to rise. found This means that even if the perpetual talk about cryptocurrency regulation is tedious, the correlations between news stories and coin prices means it is still relevant for investors. Regulation Not Always Bad News for Crypto Prices The report determined that cryptocurrency markets react significantly to news about government regulatory actions. In particular, news stories about the following topics hurt prices and trade volumes: Bans on crypto trading or the application of securities law to cryptocurrencies News that cryptocurrencies will be treated differently than conventional fiat currencies News about needing to combat money laundering and terrorist financing Restricting the use of cryptocurrencies in regulated markets Specifically, within 24 hours of these types of news stories, Bitcoin price declined over 3% on average. However, it’s not all negative. The report also found that news about the creation of laws and regulations tailored explicitly to cryptocurrencies correlates to market gains. In the 24 hour period after this type of news, Bitcoin prices increased on average 1.5%. Bitcoin Prices Fall After News of Restrictions and Bans The report offers examples of news stories that have affected coin prices. For instance, Bitcoin’s price fell in reaction to two recent news stories. about US Securities and Exchange Commission rejection of . The , which resulted in a less severe fall in Bitcoin’s price, was about an improvement measure by Japan’s Financial Services Agency forcing exchanges to take extra measures to prevent money laundering. One Bitcoin ETFs second Altcoin Prices Also Affected by Regulatory News The report also looked at other cryptocurrencies and found similar patterns. Bitcoin Cash, Litecoin, and Zcash prices react to news about regulation similarly to Bitcoin, but to a lesser extent. Monero reacts more strongly than Bitcoin. Ripple’s XRP token also reacted less, which the study determined may reflect the fact Ripple centrally controls its network, making XRP distinct from other, permissionless, cryptocurrencies. More Than Prices Affected The report found that news events affected not only the price of a cryptocurrency but also the volume of transactions, the number of wallet addresses, and even cryptocurrency mining activity. For instance, mining profitability “ .” Since profitability affects the exit and entry of miners, the report noted that “ .” declines strongly whenever regulation becomes tighter this response ultimately can also affect the security of the various cryptocurrencies Regulation Not Necessarily Bad News for Cryptocurrencies Based on the positive relationship between prices and news about useful regulatory frameworks, the report concluded that regulation is not necessarily bad news for cryptocurrencies. The market reacts positively to news of appropriate regulatory frameworks. The price responses show the sector has a preference for “ .” This means regulators can go ahead and create laws without impacting the market negatively. a defined legal status, albeit a light regulatory regime However, it is crucial that regulations are tailored to the cryptocurrency sector. For instance, to create an appropriate framework the report suggests regulators need to ensure there is a consistent approach taken globally. Different countries can’t take different types of regulatory action unilaterally. Instead, they must act together. Boundaries between national regulatory bodies may even need to be redefined to accommodate the international nature of cryptocurrency markets_._ Subscribe to my channels Medium and Twitter if you like my articles and want to learn about blockchain and cryptocurrency projects. If you have any questions about this article, please comment in the section below. Thank you!

Litecoin

Bitcoin Cash

Monero

Zcash

Twitter

Can Blockchain Help Us Become Carbon Neutral?

6 Low Cap Cryptocurrencies (under $200 Million USD) I Have My Eye On

Check out Mina's blog

Read My Stories

Buy Me a Coffee

Check out my X Profile

Too Long; Didn't Read

CTA: Download the FREE AI Productivity Shift report

New Report Finds Regulatory News Boosts Cryptocurrency Prices

New Report Finds Regulatory News Boosts Cryptocurrency Prices

About Author

Comments

TOPICS

THIS ARTICLE WAS FEATURED IN

Related Stories

Untitled Story

LLMs, Data Dysphoria, and the Global Regulatory Response

06/02/2018: Biggest Stories in the Cryptosphere

06/09/2018: Biggest Stories in the Cryptosphere

05/02/2018: Biggest Stories in the Cryptosphere

0 to Pro Crypto Trader: Your Ultimate Guide to Bitcoin and Altcoin Investing

LLMs, Data Dysphoria, and the Global Regulatory Response

06/02/2018: Biggest Stories in the Cryptosphere

06/09/2018: Biggest Stories in the Cryptosphere

05/02/2018: Biggest Stories in the Cryptosphere

0 to Pro Crypto Trader: Your Ultimate Guide to Bitcoin and Altcoin Investing

Light-Mode

Classic

Newspaper

Dark-Mode

Neon Noir

Minty

HN StartUps