On October 21, the National Development and Reform Commission publicly solicited opinions on the revision of the “Industrial Structure Adjustment Guidance Catalogue (2019 Edition)”, and planned to list “virtual currency’mining’ activities” as an outdated industry catalog.The price of cryptocurrency plummeted accordingly. As of 8 am on October 22, Beijing time, the price of Bitcoin was $621.9917 million per coin, a decline of 5.79% in one day.
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Previously, affected by the official listing of the first futures Bitcoin ETF in the United States, on October 20, the price of Bitcoin hit a new high of $66,900.
“Except for futures Bitcoin ETFs, there is a high probability that the first spot Bitcoin ETF in the United States will be approved recently, and Bitcoin’s popularity is getting higher and higher.” On October 21, TOP Network co-founder Noah Wang told Times Finance.
Bitcoin transaction price trend since July 1st (Source: Binance.com)
Chen Bo, director of the Digital Finance Research Center of the Central University of Finance and Economics and deputy director of the Bay Area International Financial Technology Laboratory, said in an interview with Times Finance that “the regulatory measures for the virtual currency industry vary greatly at home and abroad. The international environment in 2015 is more complicated, so the security and stability of the financial system are emphasized, and a strict regulatory model is adopted for Bitcoin.”
Spot Bitcoin ETF is coming too?
On October 20th, asset management company VanEck announced that its Bitcoin futures ETF has been approved by the US Securities and Exchange Commission (SEC). The SEC allowed VanEck to launch the fund after October 23, becoming the second Bitcoin futures ETF approved by the SEC for listing after BITO.
On October 19, the ProShares Bitcoin Futures ETF was officially listed on the NYSE High Growth Market (NYSE Arca) under the symbol BITO. The opening price on the first day was US$40.89, and the final closing price was US$41.94.
According to statistics from Bloomberg, the ETF has changed hands more than 24 million units, and the total transaction volume on the first day is close to 1 billion US dollars. This scale is second only to BlackRock’s carbon neutral ETF and has become the second highest transaction volume on the first day in history.
Public information shows that the ProShares Bitcoin futures ETF is registered with the US Commodity Futures Trading Commission (CFTC). Bitcoin futures contracts traded through the Chicago Mercantile Exchange (CME) charge 0.95% of investment value management fees each year. ProShares is owned by the ProFunds Group and is a professional provider of exchange-traded products. It is also one of the largest ETF issuers in the United States.
With the launch of the Bitcoin futures ETF, the price of Bitcoin broke through a new high of $66,000 each.
However, it is worth noting that the Bitcoin futures ETF does not directly invest in Bitcoin spot. The index for trading tracking is anchored in CME’s recent month Bitcoin futures. Ordinary investors only need to buy and sell stocks in the securities market with fiat currency, which is approved by ProShares. The way of swapping contracts is to sell recent contracts, buy forward contracts, track the price and index of bitcoin futures contracts, and obtain solid capital appreciation through refined management of contract exposure.
Although the stimulus effect of Bitcoin futures ETFs is far from being comparable to that of spot ETFs, the launch of futures ETFs means that the regulatory authorities are slowly opening the door to spot ETFs that are tightly closed.
Since the Winklevoss brothers submitted the first Bitcoin spot ETF application in the United States in July 2013, the SEC has successively rejected more than a dozen fund companies’ Bitcoin spot ETF applications, including well-known companies such as Grayscale, ProShares, and Bitwise.
Noah Wang believes that there is a high probability that the first spot Bitcoin ETF in the United States will be approved recently. Bitcoin is becoming more and more popular and attracting a large number of traditional investment institutions. Even if it is not approved for the time being, Bitcoin has entered the traditional investment field. It is the general trend.
“The U.S. Bitcoin market is large, and the corresponding financial derivatives will definitely increase. Sooner or later the spot Bitcoin ETF will be listed.” On October 21, Chen Bo told Times Finance and Economics.
One-day decline of some cryptocurrencies (Source: website screenshot)
Domestic strengthening of virtual currency supervision
On October 21, the National Development and Reform Commission publicly solicited opinions on the revision of the “Industrial Structure Adjustment Guidance Catalog (2019 Edition)”.
In accordance with the relevant work arrangements for the rectification of virtual currency “mining” activities, the National Development and Reform Commission proposes to include the virtual currency “mining” activity entries in the current “Industrial Structure Adjustment Guidance Catalog (2019 Edition)” in the form of supplements, in the elimination category “One The seventh item is added to “(18) Others” of “Outdated Production Technology and Equipment”, which contains virtual currency mining activities.
On October 19, the China Tax News published an article titled “Preventing Tax Risks Brought by Virtual Currency”, stating that the risk of tax loss caused by virtual currencies in China is worthy of in-depth study and discussion. It is recommended to clarify industry tax-related data and establish taxation. The overall regulatory framework and the promotion of technological upgrading of tax collection and management.
The article pointed out that from the perspective of taxation, for domestic enterprises and residents participating in virtual currency transactions at home and abroad, China should strengthen departmental collaboration and international multilateral regulatory cooperation, focusing on preventing illegal cross-border outflows of funds and using virtual currencies to avoid taxation at home and abroad, and Include virtual currency accounts in the tax-related information exchange of financial accounts.
According to a reporter from Times Finance and Economics, the current mainstream countries in the world have large differences in the regulatory policies for blockchain-based digital currencies such as Bitcoin. The policy attitudes can be divided into three categories: prohibition, restriction, and permission. China belongs to the first category.
“Because the emergence of virtual currency will have an impact on the current financial system, and it will also bring some illegal and criminal phenomena such as fraud and fundraising. To prevent financial risks and prevent investors from being deceived, the domestic implementation of virtual currency Prohibited policy.” Noah Wang, co-founder of TOP Network, told Times Finance on October 21.
In contrast, developed countries with strong capital attraction such as the United States and the United Kingdom generally allow Bitcoin within the regulatory framework, and have shown great interest in Bitcoin and blockchain technology. At the same time, some giant companies in the United States have also Layout the virtual currency industry. From Visa to PayPal, from Budweiser to Coca-Cola, all are embracing encryption and launching related products, including NFT tokens.
From the perspective of market value, the current encrypted digital currency market has developed into a trillion-level market, and there is still great potential for development in the future.
“If the crypto industry wants to grow on a larger scale, it must accept compliance.” Noah Wang admitted frankly that the recent regulatory storm in China has had a rapid impact on the local market’s crypto ecosystem. Regulators around the world have warned some top centralized exchanges and closed the legal currency channel. “If the market develops to a larger scale, it will inevitably have to face regulation directly.”
“Domestic-related businesses have now been stopped.” The brand leader of an overseas cryptocurrency exchange told Times Finance and Economics on October 21 that the reorganization and formation of personnel is now underway. Countries such as Turkey will be our next The key market for power development.
Investors open many cryptocurrency websites, and there will be information prompts that the website technology does not support access by mainland members, or shows that the network is unstable, and there is a risk of service interruption.
Tips on Cryptocurrency Websites (Source: Website Screenshot)
According to Times Finance, some Chinese employees of overseas exchanges chose to leave, and some have already started overseas purchasing services.
Up to now, exchanges include Huobi, BiONE, CoinEX, AEX, Matcha, etc., mining pools include Spark Mine Pool, Bee Mine Pool, etc., digital wallets include TokenPocket, etc., have announced the suspension or restrictions on customers in mainland China. Service.
On the morning of October 22, Beijing time, affected by the National Development and Reform Commission’s listing of “mining” as an obsolete industry, cryptocurrencies generally fell sharply. In one day, Bitcoin fell from US$66 million to US$62,100, a decrease of 5.79 %.
(Times Finance)
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