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A NYDIG study estimates the worth of regulation in terms bitcoin

30-Jun-2022 By: Rohit Tripathi
A NYDIG study estima

A NYDIG study estimates the worth of regulation in terms of increases

in the price of bitcoin | best app cryptocurrency

Following regulatory events, the crypto-positive financial services company examined the price of Bitcoin at regular intervals and discovered unmistakable proof of the events' consequences.

The necessity for regulation is a recurring subject in conversations concerning cryptocurrencies, and the assertion is frequently taken for granted. New York Digital Investment Group (NYDIG), a financial services company, has now crunched some numbers to support this claim. NYDIG has quantified the impact of legislation on the global price of Bitcoin (BTC) in a recent study.

NYDIG routinely monitored the price of Bitcoin while keeping track of legislative changes that had an impact on digital asset taxes, accounting, and payments as well as judgments regarding the reliability of service providers and the digital assets themselves. The study was restricted to the time period between September 30, 2011, and march 31, 2022, and it focused on the Americas, Europe, China, and Asia, with the exception of China.

The study took into account between 17 regulatory developments in the Americas and 10 in China. With the exception of China, price increases for Bitcoin were observed in absolute terms after a regulatory event, with the prices increasing by over 100% in every instance in a period of 365 days.

Similar trends were also seen in data relating to "average Bitcoin return," albeit less pronouncedly. 365 days after regulatory events, the price of bitcoin increased in the Americas by 160.4 percent in absolute terms and 32.3 percent in relative ones. These percentages were 181 and 53.0%, respectively, in Europe. However, the statistics were 116.9 percent and -11.2 percent in Asia, excluding China.

China served as the illustration for the rule. The authors noted that the Chinese government steadily implemented limitations on the mining and trade of digital assets, describing regulation in China as "existential." They also found that regulation had a negative influence on Bitcoin pricing in China, which served as additional proof of the effects of legislation.

The study's findings are obvious, the authors write in their conclusion. The price of Bitcoin benefits from increased regulatory certainty both in absolute terms and relative terms. They almost soon change their tone, writing: The inference is that investors value regulation transparency, despite it not always being flawless. It is important to note that there are numerous factors that might affect prices at any one time, making it impossible to directly monitor the effects of regulation.

The impacts of this noise, however, "are partially cancelled out" in the authors' conclusions because of the size of their sample, they are confident.


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