Bitcoin’s $50000 charge: International “financial giants” still doubt its identity

[Ni Hao, Global Times global network reporter] bitcoin’s unstoppable rising momentum has created a myth in the capital market. According to the data of coindesk, bitcoin reached a peak of US $50584.85 on February 16, the first time in history that bitcoin hit the highest point of US $50000. Bitcoin has fallen from a high of $50000, but it still maintains a price of $49679 and is close to $50000, according to data from coindesk website at 14:00 on the 17th. In the second week of February 2021, Tesla, MasterCard and the Bank of New York Mellon successively entered bitcoin. The support of mainstream institutions boosted the cumulative growth of bitcoin by nearly 70% from the beginning of the year. According to the price trend of bitcoin shown on coindesk, the price level of bitcoin was only $10000 at the beginning of October 2020. After leaping to the platform of $20000 in December last year, it suddenly accelerated and soared. In more than two months, it more than doubled, reaching an eye popping $50000. However, according to foreign media reports, the bitcoin market is still full of obvious bull sentiment. Cointerpoint global, an investment firm owned by Morgan Stanley, is studying whether bitcoin can be the right choice for investors, according to the U.S. blog. “Whether (Tesla CEO) musk, MasterCard or Morgan Stanley enter, the current market sentiment and momentum can’t be ignored, and many people are upset that they didn’t get on the bitcoin express,” said tranchev, chief executive of NEXO, a virtual money lending agency However, historically, bitcoin prices have been characterized by ups and downs, which are full of risks for investors. If they are not careful, they will lose everything. Even though it has reached a high of US $50000, the market is still extremely optimistic about the future trend of the special currency. However, the legitimacy of bitcoin’s identity has been doubted by the global financial official decision makers, who believe that it has caused chaos to the existing international financial order. What can not be ignored is the attitude of the new US Treasury Secretary, Yellen, who has always been negative compared with the special currency. On January 25, Yellen’s appointment was regarded as bad news, which led to a sharp plunge in cryptocurrency, with bitcoin falling more than 10% at its lowest point in the day. On January 19, Yeh, former chairman of the Federal Reserve, attended the “appointment hearing” held by the US Senate Finance Committee. She expressed her views on cryptocurrency, saying that the United States should be aware of the emerging tools for terrorist financing. Cryptocurrencies have the opportunity to be abused by illegal financing, and the government will need to review the ways in which they can be restricted and ensure that money laundering is not carried out through these channels. Yellen’s statement sent bitcoin down for three days. Another decision-making figure in international financial policy, former president of the European Central Bank, Draghi, is also hostile to the special currency. Almost at the same time as Yellen, she also said that bitcoin is a highly speculative asset involving money laundering activities, and there is a need to reach a regulatory consensus on bitcoin at the global level. China has explicitly promised that bitcoin is not legal currency. Although China does not legally prohibit individuals from participating in bitcoin trading, it explicitly forbids the establishment of an Internet platform to provide transactions for virtual currencies such as bitcoin, or the exchange between virtual currency and digital currency. On December 5, 2013, the people’s Bank of China and other five departments jointly issued the notice on prevention of bitcoin risk, pointing out that bitcoin is not issued by the monetary authority, has no legal compensation and mandatory monetary attributes, and is not a real currency. The circular prohibits financial institutions and Payment institutions from carrying out bitcoin related business and reminds individuals to guard against risks, but it does not explicitly prohibit individuals from participating. In 2017, the central bank and other seven departments issued the announcement on preventing the financing risk of token issuance, prohibiting the establishment of virtual currency trading platform in China and the exchange between virtual currency and legal currency. Subsequently, domestic large-scale virtual currency trading platforms have been shut down. Qu Qiang, assistant director of the Institute of International Monetary Studies of Renmin University of China, said in an interview with the Global Times recently that domestic supervision of virtual currencies such as special currency is very strict. Financial institutions are prohibited from participating in bitcoin business in China, and personal transactions are personal behaviors. However, we must pay attention to market risks and avoid unnecessary losses.

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