A report from the Bank of International Settlements (BIS), has stated cryptocurrency prices are directly related “to news about regulatory actions”.
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“While cryptocurrencies are often thought to operate out of the reach of national regulation, in fact, their valuations, transaction volumes and user bases react substantially to news about regulatory actions,” states the report, drafted by Raphael Auer and Stijn Claessens.
One of the examples cited in the report was the March 2017 news when the SEC declined a proposal from Gemini exchange founders Cameron and Tyler Winklevoss for a bitcoin exchange-traded fund (ETF).
“In the five minutes around the announcement, the price of bitcoin dropped by 16 [percent],” states the report.
“Another event is the Japanese Financial Services Agency (FSA) ordering six cryptocurrency exchanges to improve their money laundering procedures (June 2018). Again, prices tanked – although it seems to have taken several hours, until the start of the US. trading day, for this measure to have its full effect…”