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The growth of the cryptocurrency market has caught the attention of investors, businesses, and now, Uncle Sam. So if you’re among the 16% of Americans involved in the crypto market, you may be wondering: What do upcoming regulations mean for me?
It’s not yet clear, but we may soon have a better idea. For investors who are wondering what to make of President Biden’s recent executive order on cryptocurrency or any other new regulatory developments, plenty of experts say it’s actually a good thing. More regulation could increase market stability and the price and value of crypto, so investors can look at it with a healthy optimism, says Nicole DeCicco, founder of CryptoConsultz, a digital currency consulting service based in Vancouver, Washington.
“The train’s already left the station,” she says. “Rather than try to stop it, let’s hope that it brings some benefit to the market.”
How Crypto Regulation Could Affect Investors
No one actually knows yet how the average investor will be affected by growing regulations, at least not until the federal government decides on the specific rules. And some market participants may not feel many changes at all once the dust settles, says Marco Santori, the chief legal officer at digital cryptocurrency exchange Kraken.
Biden’s move has encouraged optimism as it signals to the crypto industry that there’s now a “cop on the beat,” and investors who were worried about the Wild West feel to the market may now see it as a safer place to invest, says Santori.
And while some investors are wary of cryptocurrency regulation, Biden’s executive order is not altogether unexpected, and is even being viewed as a positive by some in the industry. “We’ve anticipated this for years,” says Santori. “We are delighted to see it and look forward to the outcome, and the studies that the executive order will produce,” he says.
President Biden’s executive order does not establish new cryptocurrency rules or regulations, but it’s spurring federal agencies to look at potential risks and benefits. You should start by making sure you’re above-board with the IRS.
Keep in mind that with volatile cryptocurrency assets, experts recommend keeping any holdings to less than 5% of your total portfolio, and only invest what you’d be comfortable losing. Before you invest, …….