You are viewing a single comment's thread from:

RE: This Week's Great Debate: The Increasing Regulations of Cryptocurrency

Thanks for contributing! I think mainly I'm opposed to SEC regulations because they often limit the individual's ability to compete. They may institute a pattern day trading regulation, as they currently have in the stock market. This places a firm limit on the number of times an investor can buy and sell the same holding on the same day. If you engage in the buying and selling of a holding on the same day more than 4 times within a five day trading period, you get "flagged" as a pattern day trader. This then removes your ability to buy and sell any holding within the same day for a ban of 90 days. The second thing they may do is take away market making ability for individuals and instead designate that power only to the exchanges. The problem with this is that often brokerages can control price action by stacking the buys or sells in a concentrated area instead of spreading them out more evenly. They can sometimes create very large price gaps, causing a holding to hit a firm resistance on one price, which could then incite selling as individuals notice the bearish double or triple top trend. In reality the holding may have gained quite a bit volume in buys, but it won't be reflected in price action due to the market maker's power to set bids at the same price for many different holdings.