Sarah is a single mother in Portland. She’s the one up at midnight with a spreadsheet, wrangling bills and aspirations. A year ago, she took hours upon hours of research and decision making. Ultimately, she put most of her remaining savings into Bitcoin to ensure her children would not have to go through the same financial turmoil she had suffered. Now, she’s terrified. The Oregon state lawsuit against Coinbase has thrown a chilling dose of uncertainty, not to mention unwanted headlines, into her carefully laid plans.

This is not simply an introduction to Bitcoin’s price charts or technical analysis. It's about real people like Sarah. Rather, they are betting their future on an exciting new technology that they fully trust. This new technology has the promise to provide a pathway to economic opportunity, but these families today are stuck in the center of regulatory wars.

Oregon’s new Attorney General Dan Rayfield says the state is protecting investors. He is suing Coinbase for enabling the sale of unregistered crypto securities. Sounds noble, right? Let's peel back the layers. Though investor protection is very important, are we tossing out the baby with the bathwater?

In the midst of this legal storm, Bitcoin has shown itself to be surprisingly resilient, staying consistently above $80,000. Investors are taking their Bitcoin off exchanges – not a move of panic, but rather, long-term conviction. What does that tell you? It would be a strong indicator of a market where a large percentage of Bitcoin holders haven’t been easily shaken off by regulatory FUD.

Regulation: Protecting or Punishing Investors?

Sarah is spooked. And so are millions of others who don’t have the rock-solid belief of a career HODLer. The specter of regulatory enforcement action is making the market skittish, setting off panic selling and knee-jerk reactions from market participants. So, that is the human cost that is often ascribed and neglected.

The overall goal of the lawsuit is to force compliance. That’s the overall foundation of a healthy market. What happens when the regulatory hammer comes down too hard? What happens when the cost of compliance becomes so burdensome that only the biggest players can afford to play?

In doing so, we will have succeeded in crushing innovation but forced crypto businesses to leave for more friendly jurisdictions. This isn’t just bad news for Coinbase – it’s bad news for the entire crypto ecosystem in the United States. Over-regulation doesn’t remove the risk; it simply transfers it to another location. By forcing new ideas out of the regulatory light, it makes them much more difficult to regulate or oversee.

Innovation Killed By Good Intentions?

Remember the early days of the internet? Just picture what the impact would have been if regulators had attempted to strangle it in its crib with excessive or inflexible regulations. Would we be enjoying the rich, creative digital environment we somehow take for granted today? Probably not.

In a very real way, this lawsuit could have negative consequences on the crypto market. It would have the opposite effect, reducing competition and innovation and eventually harming the very investors it claims to protect. Quite frankly, the investors that this lawsuit alleges to protect are the most savvy, sophisticated, educated investors that you’ll find. Are we treating them like children?

Here's the thing: investing in anything, especially highly volatile assets like Bitcoin, comes with inherent risks. It's not a secret. The Pintu News disclaimer, similar to others we have seen, underscores just how important of a point this is. We need to be honest with ourselves: nobody forced Sarah to invest in Bitcoin. Second, she had to decisionistically choose among alternatives, a priori assessing expected benefits relative to expected costs.

It is time for individual investors to take control of their investments. They need to do their homework and invest only what they’re willing to lose.

Personal Responsibility Still Matters, Doesn't It?

We can't legislate away all risk. Trying to do so will create all kinds of perverse incentives and unintended consequences. It will suppress innovation entirely and do so potentially harming the very people that regulations are supposed to protect.

After being overwhelmingly correlated with US tech stocks, Bitcoin has recently started to decouple. This shift further indicates that it is becoming a “safe haven” asset and highlights its fundamental value. This value is precarious and can quickly be wiped out with bad regulations.

So, what's the answer? Where's the balance? Is Oregon’s lawsuit really protecting investors, or is it unwittingly hurting the very people it seeks to protect? We need to start asking ourselves this important question. Let’s continue to hold our lawmakers’ feet to the fire, before the human toll becomes too great. After all, crypto isn’t just about the price of Bitcoin. Sarah is one of millions traversing the confusing and unregulated space of crypto. She begins this journey with equal amounts of hope and trepidation. And their stories deserve to be heard.

Bitcoin's recent decoupling from US tech stocks suggests a possible shift towards a "safe haven" asset, further emphasizing its potential value. But this value is fragile, and can be easily be destroyed by the wrong regulations.

So, what's the answer? Where's the balance? Is Oregon’s lawsuit truly protecting investors, or is it inadvertently harming the very people it’s trying to help? It's a question we need to ask ourselves, and demand answers from our lawmakers, before the human cost becomes too high to bear. Because, at the end of the day, it's not just about Bitcoin's price. It's about Sarah, and the millions of others like her, who are navigating the complex world of crypto with hope and trepidation. And their stories deserve to be heard.