The past year for cryptocurrencies has been a bumpy ride to say the least. In mid of 2021, cryptocurrencies were able to reach a combined market cap of over $2 trillion, with the poster child of the market reaching a total price of over $60,000 per token. That alone was enough to send most enthusiasts of the market on a victory lap.
Following the incredible rise in prices, El Salvador became the first country to ever accept cryptocurrency as a secondary tender. They obviously picked bitcoin as the right currency for the job. Cuba quickly followed and became the second country in the world to accept crypto as a legal tender. Both of these events were monumental for the crypto movement, as they solidified it as a legitimate competitor to other currencies.
However, for all the good things that came the market’s way, there were also some unfortunate things that occurred. Crypto mining and cryptocurrency, in general, were banned from mainland China, the biggest mining zone for cryptocurrencies. Now there were multiple massive companies in China trying to make their way to other countries as quickly as possible to resume their operations. A close second was Uzbekistan and Texas, as both of them, had cheap electricity and plenty of room for massive infrastructure.
And if the news about china banning cryptocurrencies was not bad enough, countries are on ready to start better regulating the crypto market, and the US is at the forefront of this initiative. The SEC chairman Gen Gensler further hammered down the importance of regulation within the market, something that the International Organization of Securities Commissions showed their support for.
So even though the market is becoming more widely accepted, it is coming at a cost. Cryptocurrencies will still be able to grow at an unprecedented rate, but they will be subjected to even more regulation. But considering the other alternative was to ban cryptocurrencies from the country, many believe that this was a fair compromise. So unlike China that has officially outlawed cryptocurrencies within the state, the US still allows traders to buy and sell their favorite cryptocurrencies.
Another issue that received a great deal of scrutiny was the distinction that traders had to make assets and securities. While to most people this doesn’t mean much, this can be a determining factor in how the government chooses to regulate it. And with the even larger issue of market volatility, it is becoming clear that there has to be a more effective way to trade cryptocurrencies without having to fall for a scam or instantly lose money.
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