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Question #223

How can regulatory fines and enforcement actions affect Bitcoin’s market volatility?

Category: General
Regulatory fines and actions increase uncertainty, often triggering heightened market volatility.
Regulatory fines boost long term confidence reducing short term volatility significantly.
Fines and enforcement always lower volatility by removing speculative trading pressure.
Enforcement actions exert no impact because Bitcoin operates beyond governmental reach.

Why is this the correct answer?

This is correct because fines and enforcement actions introduce legal and compliance risks, leading traders to react quickly. Uncertainty around future regulation can cause sudden buying or selling, which widens price swings and increases overall market volatility.

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