Do you think that this will increase the size of crypto markets since it will increase trust, or would it decrease the size of crypto since the number of ICO will go down
I guess you are confused with the two things, one is they are going to regulate the ICO's and second thing cryptomarket and its trading volume still remains the same by nature. They are going to regulate ICO means only one thing to me, you will need to have licenses for the ICO projects, if you are investor then you will have to send your KYC's for verification, you will have to pay taxes for the investment thats made into such projects and much more things to cover under that part.
Basically it wont affect the trading patterns as it is not coming under direct regulation thats what i think about the whole scenario here.