Onerous Regulations lead to Lower Investment.
The importance of the states in this issue cannot be overstated. Though federal law generally governs financial crime cases and federal regulatory oversight is important, it is the state regulations that are severely impeding cryptocurrencies' adoption. The lack of consensus and the prohibitive cost of registering in certain states has severely decreased the interest of venture capitalists in the technology. New decisions that could require cryptocurrency exchanges to register in every state they operate in have put a damper on their use even further. Venture capital investment in cryptocurrencies peaked at $228 million in the first quarter of 2015 before declining to just $26 million in the fourth quarter. In the first quarter of 2016, investment increased again to $160 million, at least partially because of the enactment of some regulation. https://www.stratfor.com/analysis/arduous-task-regulating-bitcoin
