Self-custody rule won’t impact Bitcoin price, say analystswritten by Bella Palmer
New crypto sector-focused regulations have negatively impacted crypto prices in the past, but this time around the proposed rule probably will not lead to a Bitcoin price crash
There were various media reports this week stating that U.S. Treasury Secretary Steven Mnuchin was considering whether or not legislation governing self-custodied wallets should be implemented.
This led some analysts and crypto experts to speculate whether or not this would impact Bitcoin, and the current bullish momentum that has been driving crypto prices higher.
The threat of new crypto sector-focused regulations is a credible event which has negatively impacted crypto prices in the past, but this time around there are a few reasons why the proposed rule probably will not lead to a Bitcoin price crash.
Initially, industry executives expressed major concerns when Coinbase CEO Brian Armstrong shared what he had heard about the planned rule.
He said: Last week we heard rumours that the U.S. Treasury and Secretary Mnuchin were planning to rush out some new regulation regarding self-hosted crypto wallets before the end of his term. I'm concerned that this would have unintended side effects, and wanted to share those concerns.
These worries were amplified when Circle CEO Jeremy Allaire told Ryan Selkis that the possible regulation could be detrimental to the entire cryptocurrency sector. The comments from the two industry heavyweights led the entire industry to become cautious about the planned rule proposal.
However, recent reports suggest that the rule might require multiple transactions that are equivalent to $10,000 a day to be reported by financial institutions. Compared with the initial rumours about the rule, it is arguably less rigorous than it appeared. In fact, some experts say the proposed rule is similar to the existing FATF travel rule.
Considering that the rule could be less restrictive than the initially planned regulation, and the fact that the market has had sufficient time to act on it, it's possible that the market has priced it in at this point.
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