The Growing Need to Regulate Crypto

One of the biggest gainers of 2024 was cryptocurrency.

- Geetha Ravichandran

The US president-elect Donald Trump and his advisor Elon Musk throwing their weight behind crypto resulted in Bitcoin shooting through the $100,000 mark in December. This was a dramatic comeback after the collapse of the crypto exchange FTX in 2022, which resulted in losses of billions of dollars.

One fallout of the 2008 financial crisis was a deep mistrust of the banking system around the world. When the first successful digital currency, Bitcoin, appeared in 2009, it was perceived as a bid to circumvent regulation that was seen as ineffective and cumbersome. It was believed that cryptocurrencies would allow greater transparency and security in financial transactions.

But as a quintessentially disruptive technology, its credibility today divides experts and laymen. While many still think of it as a game of smokes and mirrors, it's endorsed by tech-savvy younger generations. At present, the global cryptocurrency market is worth around $3 trillion.

In the context of this market volume, the intrinsic value of cryptocurrency is relevant. Cryptocurrency is basically a piece of programming software; its value is linked to its momentum of exchange and its perceived investment potential. For Bitcoin, the value is also attributed to the fact that out of the 21 million available, some 19 million have already been mined.