Low-Tax, Low-Regulation States Have Highest Mainstream Interest in Bitcoin
Residents of Nevada, Texas and New Hampshire are more interested in Bitcoin and cryptocurrency than the rest of the country, according to Investing.com. Coincidentally, these are also the states with the most favorable tax and regulatory environment for blockchain businesses.
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California and Colorado are right behind them in interest levels. Showing least interest are Hawaii at #50 and — perhaps surprisingly — New York at #38.
11.2 percent of Nevadans are “interested in cryptocurrency”, according to Investing.com’s user survey covering January-September 2017. The state abolished taxes on blockchain businesses in June.
Texas had 10.5 percent interest and New Hampshire 10.4 percent. Both states have exempted digital currency traders from money transmission license requirements.
Mainstream Interest Important to Bitcoin Value
Clement Thibault, senior analyst at Investing.com, said regulation would have the biggest impact on whether Bitcoin goes fully mainstream or remains a niche asset.
“Our data shows an important correlation between regulatory measures on Bitcoin and the interest or popularity of Bitcoin in different states,” he said.
“We often like to think of Bitcoin as a medium to escape state regulation, but it is clear that each state still has the means to either advance or delay and hamper the adoption of the new digital currency.”
Coinbase, the most popular U.S. digital asset exchange, closed its business to Hawaiians citing “impractical regulatory policies”. New York, the nation’s financial capital, has been open to cryptocurrency business but set the bar high with its Bitlicense legislation.
Several smaller bitcoin and blockchain startups quit the state since, and some have speculated the regulations are a deliberate move to preserve the industry and its spoils for large Wall Street firms.
As a result, only 4 percent of Investing.com’s users in the state showed interest. However New York may be a special case — investors there may not be so open about their cryptocurrency intentions, or aren’t site users.
Investing.com put together the following infographic to highlight the connection:
Coinbase Slammed Hawaii and Closed Accounts
Coinbase wrote a scathing critique of Hawaii’s laws in February, titled “How Bad Policy Harms Coinbase Customers in Hawaii”. The state’s Division of Financial Institutions (DFI) insists digital asset companies maintain cash reserves or other “permissable investments” equal in value to its digital currency balances.
Given the volatility of cryptocurrency values and 2017’s massive bull run in particular, it’s impossible for companies in this industry to operate there. Hawaii would not budge on its position and Coinbase closed all accounts there.
The follow-on effect is a reduced interest in Bitcoin and cryptocurrencies overall, says Investing.com’s data. There’s also the possibility that tougher regulation makes cryptos seem inherently more risky to outsiders, whereas a permissive atmosphere indicates innovation instead.
Do you think there’s a direct correlation between regulation and interest levels? Please share your thoughts in the comments.
Images via Investing.com, Pixabay