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With the approval of a Bitcoin ETF by the U.S. SEC, the controversial Bitcoin has, in some sense, transitioned from a "niche asset" to a "mainstream asset."
The approval of the Bitcoin spot ETF is a significant victory for the cryptocurrency industry. Being listed on rigorously regulated stock exchanges allows investors to hold Bitcoin through traditional stock accounts, gaining exposure to Bitcoin without the complexities and risks of directly owning it. This enhances the legitimacy of the cryptocurrency industry and propels Bitcoin further into the mainstream.
Wang Yingbo analyzed the situation, stating that previously, cryptocurrency, represented by Bitcoin, and its trading were confined to a niche market. Most investors were perplexed by cryptocurrency wallets, and the barriers to entry were relatively high. The approval of the Bitcoin spot ETF implies a significant reduction in the threshold for participating in cryptocurrency investments. Bitcoin will transition from a niche market to a mass market, potentially doubling the scale of funds involved. In a reflexive process, rising prices may attract more increases, providing substantial speculative opportunities for Bitcoin in the short term.
As Bitcoin becomes a mainstream asset, it signifies more institutional investors will participate in Bitcoin trading. Cao Xiao told 21st Century Business Herald reporters that Bitcoin is becoming a market dominated by institutional investors. Overall, with the launch of Bitcoin spot ETFs, the Bitcoin market is expected to mature. The entry of institutional investors implies the subsequent emergence of various financial products beyond ETFs, resulting in a more stabilized Bitcoin price and reduced costs for risk management, marking a significant watershed moment.
However, a bifurcated view is needed for the future. According to Liu Bin, in the short term, the approval of Bitcoin ETFs is beneficial for the cryptocurrency industry, attracting funds into the market and driving up Bitcoin prices. Various quasi-financial products related to Bitcoin will continue to emerge, entering the sight of more financial institutions and individual investors. In the long term, the development of Bitcoin and the cryptocurrency industry still needs to address many practical issues, such as its intrinsic value and integration with the traditional financial ecosystem.
Moreover, increased market participation also implies more extensive and stronger regulation, and the associated risks should not be underestimated. Wang Yingbo analyzed that, on the one hand, there were significant gray areas in previous Bitcoin transactions, such as money laundering and illegal transactions, occupying a high proportion of Bitcoin transactions. With the approval of spot ETFs, the transparency of Bitcoin transactions will increase, leading to more robust crackdowns on such illegal activities, directly impacting Bitcoin's market value.
On the other hand, currency is sovereignty, and the widespread use of Bitcoin may gradually erode the currency sovereignty of various countries, affecting financial income derived from coinage taxes, exacerbating the financial difficulties of governments. This is clearly unacceptable to governments, and the larger the scope of Bitcoin usage, the greater the intensity of the crackdown on Bitcoin. While the approval of Bitcoin ETFs may be a massive short-term positive, the long-term risks should not be overlooked.
From a positive perspective, Cao Xiao analyzed that although the Bitcoin market carries high risks, and there is considerable controversy about the prospects of using Bitcoin, it is essential to view the Bitcoin market as an inseparable systemic issue amid the development of the underlying technology architecture of the financial system based on blockchain. Bitcoin itself may not be crucial, but the public chain behind Bitcoin could become the underlying technology for future financial technology facilities, making it important.
Despite the approval of Bitcoin ETFs, the global divergence on Bitcoin and cryptocurrencies remains significant.
It's essential not to overlook the series of bankruptcy and scandals that have occurred in the cryptocurrency circle, such as the collapse of the FTX cryptocurrency exchange. Its founder, Sam Bankman-Fried (SBF), was convicted of fraud. Other exchanges have also been accused of contempt for U.S. securities laws. Binance, the world's largest cryptocurrency exchange, recently admitted to violating U.S. anti-money laundering laws, causing many investors to harbor deep suspicions.
In Liu Bin's view, the approval of Bitcoin ETFs is just a milestone in the development of Bitcoin. Bitcoin and the cryptocurrency field still face inherent contradictions, so long-term development warrants observation and validation over time. |
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Post time 19-1-2024 21:11:13