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10 July 2021: While many have been hesitant or just resistant to the idea of regulation within crypto, it is important to consider the alternative point of view in how regulation could actually provide significant benefits to the space, especially when considering the idea of further mainstream adoption. This article will examine the rise of meme coins and the pump & dump schemes that have been heavily visible within crypto in the past several months. Additionally, this will take the devil's advocate approach in favor of regulation.
Get Rich Quick... Right?
At some point during the past year or so, you have probably heard someone say to you how they were up 2000% on a coin and that it was going to the literal moon. Crypto Twitter was absolutely teeming with expansive life of various super experts predicting with perfect accuracy the future target of all kinds of different projects. That is, up until the major correction back in May. Since then, much of the hype has dissipated and the Twitter-verse of cryptocurrencies has fallen much quieter.
With the major hype surround first the labeled meme stocks of GME & AMC, Dogecoin was next on the list for a quick pump & dump by Reddit. Initially, that seemed to work too and it led to the rise of numerous copycat shitcoins (with many of them being Dogecoin rip offs, like SHIB & BabyDoge) with no fundamental project development or actual use cases.
While not a fan of Dogecoin, it was never designed initially to just be a pump & dump. In fact, at first, it actually served the cryptocurrency space well by providing a fun loving way for new interested individuals to learn about cryptocurrencies. Think of it as the on ramp to better, more sophisticated projects for plenty of young, new investors. The problem is, the Reddit pump & dump led to all of those copycats, and it has essentially plagued the space with baseless, useless projects.
The Case for Regulation
From an outside perspective, especially with regards to what cryptocurrencies actually are, regulation should indeed be frowned upon. However, with loads of new shitcoins being created almost daily, it will be much harder for brand new interested individuals to avoid being suckered into another baseless project.
Regulation could help to solve this issue. By providing more protections for cryptocurrency investors, it could offer the safety net for more of the mainstream market to enter on. Thus, by allowing for the regulation of cryptocurrency investing, it could actually help to encourage more rapid, sustainable growth within the space rather than having the majority of new investors get wiped out from massive corrections due to meme coins pumping to unrealistic price valuations.
Major mainstream adoption is probably going to require some playing by the traditional rule book. Could the space grow without it? Obviously. The problem is the majority of "investors" (being mostly random individuals looking to cash in on the hype) will generally be less informed to avoid FOMOing into bad projects. If mainstream adopters are wiped out every market cycle, it is going to discourage long term growth.
Summary
Personally, I am an advocate for the space staying unregulated, at least to a certain degree. The death of meme coins and shitcoins would undoubtedly help the reputation of the entire cryptocurrency space, but it should not come at the cost of control over this market. The last thing any hardcore cryptocurrency enthusiasts want to see is this market get turned into just another government controlled plaything.
That said, the benefits of certain regulation could in fact benefit cryptocurrencies tremendously. So, it is important to consider all the factors at play when talks of regulation come up. Should cryptocurrencies be regulated? Do you feel regulation is inevitable, despite what the crypto community believes? Leave your thoughts down below!
