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Question #552

How could new regulatory frameworks in the UK and the US lead to both short term volatility and long term stability for Bitcoin markets?

Category: General
New regulations will immediately prohibit all Bitcoin trading causing permanent market freeze complete investor frustration
UK and US rules only affect Bitcoin mining operations and leave trading volumes completely practically unaffected
Short term uncertainty over regulatory changes can spike volatility but clear long term rules stabilize markets

Why is this the correct answer?

When new regulations are proposed, short term uncertainty about what rules apply can lead traders to react strongly, causing price swings. Over the long run clear frameworks reduce legal risk, increase confidence for institutional investors, and support stable market growth.

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