Highly Correlated to Regulatory Action: Central #Bank
New research has found that, despite the popular idea that cryptocurrencies operate generally outside the reach of national regulators, regulatory actions still have a huge impact on #crypto
markets. The research is presented in a report by the Bank for International Settlements (BIS), an organisation owned by 60 of the world’s central banks from countries cumulatively making up 95 percent of global GDP.
In the report, the data presented shows that while markets do not generally respond to news about central banks creating their own #digitalcurrencies
or issuing general non-specific warnings about cryptocurrencies, they show a significant response to regulatory announcements regarding the legal status of cryptocurrencies and initial coin offering (ICO) tokens, as well as possible expansion and enforcement of AML, KYC, and CFT regulations.
According to the report, four major findings were established about the response of crypto markets to regulatory actions and announcements.
First of all, crypto markets were found to respond most significantly to news reports and events concerning bans, restrictions, or legal battles on cryptocurrencies and ICOs. Where the news in question directly concerns regulatory decisions or actions regarding the legal status of crypto assets, markets respond very strongly.
This also includes issues surrounding securities regulation, such as the ongoing ambiguity regarding the United States SEC’s pending decision on whether to permit a bitcoin exchange-traded fund (ETF). This does not only work negatively, as according to the report, markets also react positively to news about possible new legal frameworks designed to accommodate cryptocurrencies and ICOs.
Second, regulatory news about AML/CFT measures and restrictions on crypto’s ability to integrate with traditional financial systems due to regulatory action or non-action was also found to have a noticeable effect on crypto markets. #bitcoininfo #bitcoinnews
bitcoin.infoFor example, news that a crypto exchange is denied access to banking services within a regulated financial system has a noticeabl