Regulatory changes can be a double-edged sword for the crypto market. On one hand, clear and supportive regulations can lead to increased institutional interest, like when the U.S. approved Bitcoin ETFs. On the other hand, hostile regulations—such as China’s repeated bans on crypto trading—can cause immediate market downturns and force traders to look for new platforms or assets. Regulations essentially set the playing field for crypto, determining who can participate, how assets can be traded, and what kinds of projects can be developed. Whenever new rules come out, you can expect volatility to spike as traders react to the uncertainty.
