During the past few years, there are lots of people who have been looking for ways to diversify their investments. One of the most popular options has been the world of cryptocurrency. Among the various options for cryptocurrency include Bitcoin, Litecoin, Ethereum and several others. For those who are thinking about trading on an LTC Exchange, there are some people who are wondering if more regulation is coming for the world of cryptocurrency. Why would more regulation be desirable for certain entities? What might this mean for people who trade cryptocurrency on a regular basis? There are a few important points to keep in mind.
Cryptocurrency Is Very Hard To Track and Trace
There are plenty of people who have spent a lot of time trading on traditional stock markets. Some of the biggest examples include the NASDAQ Stock Exchange, the New York Stock Exchange, and even foreign stock exchanges. These traits are very easy to track. Most of the companies on most stock exchanges file relevant paperwork with a Securities and Exchange Commission (SEC) and anyone who makes money on the stock exchange is provided documentation for tax purposes.
On the other hand, the same is not true when it comes to cryptocurrency. For example, not everyone who trades cryptocurrency ends up paying taxes on it. Furthermore, it may be difficult to track the flow of money across these cryptocurrency exchanges. At first, governments may not have cared that much about this. They may have seen cryptocurrency as more of a temporary fad instead of a viable medium of exchange for investing or purchasing products and services. Obviously, cryptocurrency is here to stay and the approach of governments has started to change.
What Might Regulation Look Like for Cryptocurrency?
Right now, there are still a lot of question marks regarding what regulation might look like for certain forms of cryptocurrency. For example, there are some people who believed that governments may ask cryptocurrency exchanges to make it easier to track trade that people make on the market. They may want to track the flow of Bitcoin, for example, from person to person. The calls for regulation are only going to get louder if people begin to use cryptocurrency as a medium of exchange for goods and services in the physical world.
There are also some people who are concerned that the government may step into cryptocurrency exchanges and ask these agencies to track the trades that people made for tax purposes. Some people who have been involved in cryptocurrency for a long time are concerned that this may hurt the popularity of cryptocurrency itself. Even though these calls are still relatively new, many people are looking at longer investment horizons and are wondering what this might mean for return rates in the future.
Will Regulation Be Coming Soon?
Finally, there are some people who are concerned that regulation might be imminent. Right now, there are no urgent calls for regulation and it looks like investors are going to be safe for now. At the same time, the future is still very much up in the air. Right now, we are dealing with a serious economic crisis and this could be a prime-time for governments to overhaul how they regulate trades, investment, and exchanges. Therefore, it will be interesting to see how the markets respond. Cryptocurrency has been growing by leaps and bounds and the more popular it gets, the bigger the calls for regulation are going to be. For now, cryptocurrency is primed to continue to grow in the near future, providing people with generous returns.
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