updated - May 9, 2021 Sunday EDT
Cryptocurrencies are finally coming into their own, with popular tokens like Bitcoin and Ethereum now commanding household recognition across the developed world. With a hoard of avid crypto-enthusiasts at their backs, these cryptocurrencies have reshaped the modern marketplace and inserted themselves into the economic conversation despite the protests of their chief critics. Nonetheless, cryptocurrencies and Bitcoin in particular have always been a huge target in the market - but that's beginning to change thanks to regulation.
Will increased regulation lead to the wider adoption of Bitcoin, bolstering the broader crypto-market all the while? Here's a plunge into why increased scrutiny could ultimately help Bitcoin make it big.
For a long time, few people trusted Bitcoin
Whether you love or despise cryptocurrencies, one fact has always been undeniable; by and large, cryptocurrencies of all shapes and sizes were laughed at and decisively derided whenever they forayed into the mainstream marketplace. Despite all the jokes, insults, and criticisms both legitimate and illegitimate hurdled at major contenders like Bitcoin, however, they've thrived and remained a mainstay of the market for many years now. As a matter of fact, there are plenty of reasons to believe that cryptocurrencies like Bitcoin are becoming larger facets of the market than many traditional icons of the economy that have prospered for decades.
A new report indicates that Bitcoin is on track to outpace MasterCard when it comes to transferring value, for instance, which is indicative of the fact that one-mocked cryptocurrencies are becoming sizable players on the market who are respected in their own right. One reason that Bitcoin has been able to endure so long is doubtlessly the fact that tightening regulation and increased scrutiny over the digital token has forced it to keep its nails clean and strive for perfection despite the many obstacles in its path towards mainstream acceptance.
Furthermore, overall confidence in the cryptocurrency market is being buoyed by the fact that behemoth financial institutions are finally starting to pay attention to the fast growth of the crypto-market. Massive economic actors like J.P. Morgan Chase and Citigroup have completed blockchain trials, for instance, and international giants like IBM and Intel and deeply interested in the digital ledger technology that underpins Bitcoin's enduring popularity. When the big fish in the pond start paying attention to cryptocurrencies and their technology like this, it's only a matter of time until tokens like Bitcoin go from being a niche investment item to a commonplace part of the economy.
Regulation can both help and hurt Bitcoin
More than even investor interest and the approval of big banks, however, increased regulatory scrutiny is likely to bolster Bitcoin well into the future. Elsewhere, however, eager legislators who will leap at an opportunity to act digitally-savvy will likely constrain Bitcoin with undue regulation that only stymies the acceptance of cryptocurrencies which are already getting a boost with platforms like Harga Bitcoin. The dual-faceted nature of regulation is effectively a double-edged sword; it will help make Bitcoin more legitimate in the eyes of a cautious, skeptical public, but it will also drive down investor interest in the currency and put up more obstacles for professionals pushing it forward to overcome.
By far the most positive effect of increased regulation will be the fact that Bitcoin will become more popularly accepted by skeptical consumers who are scared of losing their money. According to a survey initiated by Blockchain Capital, for instance, only about 27 percent of all millennials trusted Bitcoin more than they did traditional financial institutions like Wells Fargo. If cryptocurrency enthusiasts want Bitcoin to become a serious mainstay of the economy, it has to inflate that figure and become a widely-accepted currency that has a veneer of legitimacy to drape over itself.
Luckily, Bitcoin is likely to go up from here - as cryptocurrencies improve and become more popular, the trust behind these digital tokens will naturally increase, developing a steady momentum for the world's leading cryptocurrency that will in turn fuel additional regulation and respect. If Bitcoin is to survive and thrive in the long-term, however, it must deftly navigate a regulatory framework that will grow denser and denser while remaining independent and enticing to crypto-enthusiasts around the world who view it as a non-traditional economic investment. At the end of the day, Bitcoin's fate could be determined by whether the digital token can toe a fine line between accruing legitimacy for itself in the eyes of mainstream economic actors while remaining alluring and mysterious enough for its core base of users to support.
Expect for regulatory hurdles to keep popping up in Bitcoin's path as the future approaches, but don't necessarily think that's a bad thing for the world's most popular cryptocurrency. Increased regulation will present challenges to Bitcoin, but the new rules will effectively act as stepping stones towards widespread legitimacy that can only bolster the digital token's long-term prospects.
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