CSI Observation: speculation in coins is a huge risk, the trend of strict regulation

最近,比特币交易再次遭到一些大型商业银行的“封堵”,可能蕴含从严监管新信号。

CSI Observation: speculation in coins is a huge risk, the trend of strict regulation

In recent times, Bitcoin has once again been on a “roller coaster” ride that has seen it rise and then plummet. In addition to the frequent price spikes and drops, reflecting the unusual frenzy of speculation, the illegal and criminal activities surrounding virtual currencies have also been exposed, prompting all parties to further examine the regulation of virtual currencies. In fact, there is a broader consensus to strengthen the regulation of virtual currency trading. Recently, bitcoin trading has once again been “blocked” by some large commercial banks, which may signal a new level of strict regulation.

Price spikes and drops are almost always associated with virtual currency trading. This characteristic has been on full display for the past two months or so, with bitcoin historically surpassing the $60,000 mark at the start of March and then falling sharply from a high of nearly $65,000 in mid-April, dropping nearly 30% of its market value in just over a week. On May 15, the price of bitcoin fell below $46,000, almost back to where it was before it rose in March.

The price fluctuations reflect the prevalence of speculation in virtual currencies and the huge risks they pose. Bitcoin is not a currency; by nature, it is a specific virtual commodity. Bitcoin trading, as a commodity bought and sold on the Internet, allows the general public the freedom to participate at their own risk. However, Bitcoin is fundamentally different from financial commodities in that it is not backed by real value, does not have sovereign credit or commercial credit, and the pricing of transactions largely stems from speculative speculation. Ordinary investors may face significant trading risks by participating. Some people have counted that from 2016 to the end of 2020, there were a total of 10 instances where Bitcoin fell 20% and above cumulatively; 7 instances where it fell 30%; and a total of 4 instances where it fell by more than 48%.

Not only is it a risky transaction, but in recent years, illegal and criminal activities surrounding virtual currencies have also been on the rise. The China Financial Stability Report (2014) has hinted at three major risks that bitcoin trading may bring: first, bitcoin’s network trading platform, process and rules lack regulatory and legal safeguards, and are prone to price manipulation and false trading, etc., and its account fund security and clearing and settlement links are also at risk; second, bitcoin prices lack reasonable support and can easily fall into speculative tools, or even “bubble bursting”; third, the flow of its funds is difficult to monitor, providing convenience for illegal criminal activities such as drug and gun trading and money laundering. Some media reported that the largest U.S. oil product pipeline operator, which recently suffered a hacker extortion, was forced to pay a ransom in virtual currency, a move that also prompted the parties concerned to further examine the issue of regulation of virtual currency.

Recently, a domestic joint-stock bank banned accounts for bitcoin transactions, sparking a public debate. The bank said in a statement that the move was “to protect the property rights of the public, maintain the legal tender status of the RMB and prevent money laundering risks. This is not the first time that financial institutions have “blocked” bitcoin transactions. Shortly after the People’s Bank of China and other departments jointly issued a notice on preventing bitcoin risks, more than a dozen domestic commercial banks announced a ban on bitcoin transactions in 2014.

Bitcoin-related transactions are facing increasing scrutiny and regulation around the world. Regulators in several countries have either explicitly banned trading or introduced policies to severely restrict it. In recent years, domestic authorities have maintained a high degree of regulatory pressure on virtual currency trading, and have continued to increase their regulations.

In the opinion of some observers, the recent financial institutions have again taken action against bitcoin trading after many years, which may release a new signal of strict regulation. In this regard, virtual currency trading participants, especially investors, should pay attention. At the moment, there are no more bitcoin trading venues in the country, and there are no consumer protection measures to trade bitcoin over the wall, so if you encounter risks, you will have to bear the consequences. In short, there are risks involved in coin speculation, and you need to be careful when entering the market.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/csi-observation-speculation-in-coins-is-a-huge-risk-the-trend-of-strict-regulation/
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