The SEC Ruling Should Be Positive, Not Negative For Bitcoin, Ethereum, And Litecoin

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Digital currency traders have it wrong. The SEC ruling that treats digital currencies as common investments is positive, not negative for cryptocurrencies, at least for now.

Cryptocurrencies traded sharply lower on Tuesday, following an SEC ruling that cryptocurrency “IPOs” or Initial Coin Offerings (ICOs) are investments, and therefore, should be subject to the same rules as regular stocks.

*As of Tuesday 4pm

That would certainly slow down the pace of ICOs and the money that flows into digital currencies, and therefore, cool off investor enthusiasm.

While this is true for new digital currencies on the ICO pipeline, it isn’t true for the existing digital currencies. In fact, the slow-down of ICOs will limit the supply of digital currencies at a time when they are gaining traction as a medium for exchange. That’s certainly bullish, not bearish, for such existing digital currencies, as Bitcoin, Ethereum, Litecoin etc.; and a short-term rebound should be imminent.

Still, governments consider digital currencies a threat to their monopoly on printing money. And the SEC ruling may be just the beginning of more regulations to come, undermining the very existence of legitimate digital coin exchanges.

That’s something investors should keep in mind before pouring more money into digital currencies.

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