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Proposed Crypto Regulation Bill will Ease Crypto Market Volatility

Story Highlights

To protect investors’ interests, the U.S. Congress is leaving no stone unturned to regularize the cryptocurrency market in the United States. In this direction, a bill was proposed by the Senate Agricultural Committee on Wednesday.

The tug of war to regulate the cryptocurrency market just got hotter in the United States. On Wednesday, Deborah Ann Stabenow, the Chairwoman of the Senate Agricultural Committee and a Democrat from Michigan, and Senator John Nichols Boozman, a Republican from Arkansas, proposed a bill to regulate cryptocurrencies in the U.S.

Under the proposed bill, the senators seek to make the Commodities Futures Trading Commission (CFTC) the sole regulator of digital commodities, including ether (ETH) and bitcoin (BTC), in a highly volatile industry.

If passed, the bill would increase the operational purview of the CFTC, which has the expertise in regulating derivatives (swaps and futures).

It is worth mentioning here that multiple proposals by various committees have been put on the Senate table over the past few months.

In June, a crypto bill was proposed by Senator Cynthia Lummis, a Republican from Wyoming, and Senator Kirsten Gillibrand, a Democrat from New York. Through the bill, they laid emphasis on regulation and tax treatments of digital assets, along with the roles of the CFTC and the Securities and Exchange Commission.

Further, in July, the House Financial Services Committee was seen framing a bill that sought to enhance the role of the Federal Reserve in the U.S. crypto market.

As of now, the proposed regulators for the crypto market include the CFTC, the U.S. Securities and Exchange Commission, and the Federal Reserve.

What Is Cryptocurrency and How Does It Work?

Cryptocurrencies, which includes bitcoin, ether, tether, and many others, are virtual currencies used for exchange purposes across a wide network of computers. Crypto transactions are secured by cryptography and are not governed by any authority in the United States. These are based on Blockchain technology.

Which Are the Best Cryptocurrency Stocks?

To answer this question, we have selected three stocks from TipRanks’ list of the best cryptocurrency stocks in the United States, which are as follows: NVIDIA Corporation (NASDAQ: NVDA), Block, Inc. (NYSE: SQ), and Coinbase Global, Inc. (NASDAQ: COIN).

A brief discussion on these top three cryptocurrency stocks (by market capitalization) from the technology sector, along with a consolidated chart designed using TipRanks’ Stock Comparison tool, is provided below.

NVIDIA Corporation (NASDAQ: NVDA)

The $463.2-billion semiconductor company manufactures and provides cryptocurrency mining processors through its Compute & Networking segment. The company believes that the demand for mining processors is highly dependent on laws and regulations, technological advancements, cryptocurrency prices and standards, and multiple other factors. The company’s CMP HX is a cryptocurrency mining graphic processing unit (GPU).

On TipRanks, analysts are unanimously optimistic about NVDA’s prospects and have a Strong Buy consensus rating based on 25 Buys and five Holds. NVDA’s average price target of $245.55 suggests 32.54% upside potential from current levels. Year-to-date, shares of NVDA have declined 38.5%.

Investor sentiment on the stock is Neutral. The number of portfolios holding NVDA stock has increased 0.5% in the last 30 days while decreasing 0.2% in the last seven days.

Block, Inc. (NYSE: SQ)

The digital payments company’s mobile application, Cash App, equips its customers to purchase bitcoin (a cryptocurrency). In this process, the company generates bitcoin revenues, which accounted for nearly 57% of Block’s total revenues in 2021. On a year-over-year basis, the company’s bitcoin revenues grew 119% in 2021. The high demand and prices of bitcoin could be a top-line driver of this $45.9-billion company in the quarters ahead.

The company commands a Strong Buy consensus rating based on 29 Buys, seven Holds, and one Sell. SQ’s average price forecast of $120.97 mirrors a 52.95% upside potential from the current level. Year-to-date, shares of Block have decreased 51.8%.

According to TipRanks, investor sentiment is Negative on SQ stock. The portfolios with exposure to SQ stock have decreased by 0.6% in the last 30 days and 0.3% in the last seven days.

Coinbase Global, Inc. (NASDAQ: COIN)

The $14.9-billion company operates as a cryptocurrency exchange platform. Customers can access crypto markets in at least 100 countries through its technologies and financial infrastructure. Investments in product development, new product launches, and long-term prospects of the crypto market could help the company deal with near-term volatilities.

Year-to-date, shares of COIN have tanked 73.2%, while its average price forecast of $112.78 commands 67.75% upside potential. Also, the company has a Moderate Buy consensus rating based on 12 Buys, six Holds, and two Sells.

The number of portfolios with investments in COIN has decreased 0.4% in the last 30 days, and 0.1% in the last seven days. Investor sentiment toward the stock is Negative.

Concluding Remarks

It is clear from the above discussion that the U.S. Congress is eager to regulate the cryptocurrency market in the country. The bill by the Senate Agricultural Committee has a strong chance of survival, especially considering the support it has garnered from top officials.

A proper listing of digital commodity platforms, monitoring of trading activities, and disclosure of vital information would protect investors’ interests against any frauds and manipulations. Also, this would eventually help in easing out the volatility in the crypto markets.

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