Bitcoin is a currency: US court ruled that the price immediately rose to $10,000

Source: China Fund News

Trainee reporter Wen Jing

On July 26, Beijing time, Bitcoin exploded rapidly, breaking through the four major barriers of 9700, 9800, 9900, and 10000 in a day. At around 6 pm, according to the quotes of Bitcoin trading platform Bitstamp, Bitcoin was close to 10084 US dollars, with a 24-hour increase of more than 5%. At the same time, digital currencies such as Ethereum, Litecoin, and Ripple rose collectively. Recently, the US Federal Court stated that according to Washington law, Bitcoin is defined as a "currency."

9700! 9800! 9900! 10000! Bitcoin keeps rising

On July 26, Beijing time, cryptocurrencies collectively rose. Bitcoin broke through the four major barriers of 9,700, 9,800, 9,900, and 10,000 in a row, with a 24-hour increase of more than 5%. This is the fourth time this year that Bitcoin has reached the 10,000 mark. In addition, Ethereum rose by more than 10% in 24 hours; Ripple rose by more than 5% in 24 hours.

According to Bloomberg, on July 25, a U.S. federal court stated that the virtual currency Bitcoin is a "currency" covered by the Money Transmitter Act of Washington, D.C.

The court refused to dismiss criminal charges against Larry Dean Harmon, the operator of an underground Bitcoin trading platform. Under federal law, he was charged with operating an unlicensed money transmitting business under District of Columbia law while engaging in money laundering. Harmon was indicted by a federal grand jury in 2019 after he allegedly portrayed his platform as a service for stripping Bitcoin of its ties to illegal transactions. He sought to dismiss the claim that his operation was an illegal money transmission, arguing that Bitcoin is not a "currency" and his platform is not a "money transmitting business" under the United States Code.

Beryl A. Howell, Chief Judge of the District of Columbia, explained, “Currency is typically a means of exchange, a method of payment, or a store of value. Bitcoin is all of these things.”

In September 2015, according to foreign media reports, the U.S. Commodity Futures Trading Commission (CFTC) defined Bitcoin and other virtual currencies as commodities, the same classification as crude oil or wheat.

Since then, there have been voices saying that the United States will classify Bitcoin as a security, but according to CNBC, this statement was denied by officials from the U.S. Securities and Exchange Commission (SEC) in June 2018.

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Recently, Federal Court Chief Judge Beryl A. Howell said in her ruling that "Money generally means a medium of exchange, a method of payment, or a means of storing value, and Bitcoin is such a thing."

The founder of blockchain investment institution Chain Capital said that the US federal court identified Bitcoin as Money, not Currency. Money and Currency can be simply translated into Chinese as "currency or money", but there is a big difference. "Money includes Currency, and Currency generally has some restrictions, such as Fiat Currency specifically refers to legal tender."

In macroeconomics, money refers to currency, which has three main functions: value storage, unit of account and medium of exchange. There are two forms: commodity money and legal tender. In contrast, currency is the concept of currency, also known as "cash", which refers to paper money (Cash) and coins (Coins) held by the public. Cash is the legal tender of a country and the main form of base money provided by the central bank.

Henry, Vice President of MXC Group, said that first of all, the decision that Bitcoin should be defined as currency was made by a US federal judge, and there is no formal legislation. However, the decision of a US federal judge will attract some attention. US law follows the tradition of case law, and subsequent relevant decisions will follow the decisions of previous Bitcoin-related cases and prompt the creation of relevant legislation. He believes that the current decisions on Bitcoin-related cases in China, the United Kingdom and Germany define Bitcoin as an asset rather than a currency. If the final decision of this case defines Bitcoin as a currency, it may trigger countries to think about the definition of Bitcoin and choose the definition that is most beneficial to their own interests. In the end, the legislation and supervision related to blockchain and Bitcoin will become more and more perfect, and crypto assets will truly be combined with other industries.

Noah Wang, co-founder of TOP Network, said that the U.S. federal government's definition of Bitcoin as a currency is a very important step in the legalization of digital currency and its entry into the mainstream vision. This move by the United States is also a symbol of following the world trend and actively integrating into the world of digital currency. Because as the financial attributes of Bitcoin and other digital currencies are widely recognized, more and more countries have recognized them as funds. For example, Russia has initially passed a bill recognizing the legal status of digital currency, but prohibiting it from being used as a means of payment. China has also been launching central bank digital currency and has entered the testing phase. In particular, the digital currency issued by the central bank will have a strong impact on the US dollar in the future, and may even replace the status of the US dollar. As a world power, the United States cannot watch other countries develop a digital currency economy and replace the US dollar. Therefore, the United States will inevitably make some arrangements in the field of digital currency. However, defining Bitcoin as a currency does not mean that Bitcoin will replace the US dollar. After all, the US government cannot hand over the right to mint coins to a decentralized currency.

Professor Yu Fenghui, an economic and financial commentator, believes that the ruling may have a subtle impact on how the market treats Bitcoin, but it will establish parameters for how the District of Columbia regulates cryptocurrencies in money transmission, which also aligns Washington DC's rules with the way federal state authorities treat Bitcoin for anti-money laundering purposes. That's all, and there is still a long way to go to give Bitcoin a globally agreed currency identity.

Industry insiders: Bitcoin will start a "big bull market" in 2020

In the afternoon of July 26, Beijing time, the price of Bitcoin against the US dollar rose rapidly, breaking through $10,000. As of press time, the price of Bitcoin has fallen back to around $9,950.

Since 2020, the price of Bitcoin has exceeded the 10,000 yuan mark three times in February, May and June. After the correction in early June, the price of Bitcoin fluctuated above 9,000 US dollars. Since July 21, it has risen for many consecutive days. Four months ago, Bitcoin once fell below 4,000 US dollars.

Bitcoin was created in January 2009. On November 29, 2017, the price of Bitcoin exceeded 10,000 US dollars for the first time, with a market value of nearly 170 billion US dollars, and climbed to a historical high of 20,000 US dollars on December 19. Since then, the price of Bitcoin has fluctuated rapidly and dropped.

Recently, cryptocurrency analyst PLANB asked his followers on Twitter about their views on the 12-18 month price outlook for BTC. Of the 13,339 respondents, 69.6% said they believe Bitcoin will trade at more than $20,000 by the end of 2021.

The Crypto Research Report predicts that the price of Bitcoin will increase 40 times by 2030. The research report believes that the target markets for cryptocurrencies such as Bitcoin include tax evasion, value storage, online transactions, remittances, small payments, reserve currencies, online crypto transactions, online gambling, offshore accounts and consumer loans. According to the analysis results of the report, Bitcoin will play a pivotal role in these markets, which will trigger a large-scale bull market and push its price up to $397,000 in 10 years. The report estimates that the potential market size of Bitcoin is $212 trillion, while the current penetration rate is less than 0.44%.

The report believes that Bitcoin is currently at the starting point of the application curve. When Bitcoin penetrates about 10% of the total target application market, its price is likely to be close to $400,000. Based on this analysis, the report predicts that Bitcoin prices will continue to rise before 2025, and then reach this price point in 2030.

The researchers also said that cryptocurrencies such as Ethereum, Litecoin, Bitcoin Cash and Stellar will also rise along with Bitcoin. The report predicts that by 2030, the growth in adoption will lead to a 4,000% increase in Bitcoin, a 1,600% increase in Ethereum, a 5,000% increase in Litecoin and a 5,400% increase in Bitcoin Cash. At the same time, Bitcoin prices will also be affected by speculation, which is the main driver and price determinant of the cryptocurrency market.

Joseph Young, an analyst at Cointelegraph, said that there are signs that Bitcoin will see a big bull run in 2020, and it is expected that Bitcoin will try to return to its 2017 historical highs, and may even break new highs. The unprecedented monetary quantitative easing policy has led to an oversupply of currency in most markets, which will accelerate the promotion of Bitcoin to become digital gold.

According to CRYPTOCOMPARE data, the current Bitcoin trading situation is ranked by trading currency. USDT ranks first, accounting for 64.77%; the second is the US dollar, accounting for 11.26%; the third is the Japanese yen, accounting for 9.32%; the fourth is the Korean won , accounting for 3.83%; the fifth is the euro ( 1.1709 , 0.0064 , 0.55% ), accounting for 3.73%.

my country's central bank accelerates digital currency testing, and application scenarios are worth looking forward to

As of July 24, among the blockchain concept stocks that hit the daily limit, Aikon Technology and Qingdao Zhongcheng recorded two daily limits in two days, and China Electronics Xingfa recorded two daily limits in three days.

On July 22, it was reported that the central bank will issue the "Notice on the Release of Financial Industry Standards to Promote the Standardized Application of Blockchain Technology" and the "Blockchain Technology Financial Application Evaluation Rules" to promote the standardized development of blockchain technology in the financial system. This is a regulatory document on blockchain issued by the highest official authority in China.

On July 15, the People's Bank of China is planning to test its digital currency on the platform operated by Meituan Dianping. It is reported that Meituan has recently been discussing the use of this virtual currency called Digital Currency Electronic Payment (DCEP) in the real world with the Digital Currency Research Institute of the People's Bank of China. The announcement on Didi's official website also shows that the Digital Currency Research Institute of the People's Bank of China and Didi Chuxing have officially reached a strategic cooperation agreement to jointly explore the scene innovation and application of digital RMB ( 7.0010 , -0.0174 , -0.25% ) in the field of smart travel, and promote the platform ecology construction of digital RMB in diversified travel scenarios.

At the beginning of this year, state-owned banks such as the Agricultural Bank of China and the Bank of China have begun to pilot the launch of the central bank's digital currency on a small scale. The three major operators such as China Mobile have also joined in. In addition to financial institutions, from the perspective of pilot areas, digital currency has also been piloted in 19 companies including McDonald's in Xiongan. Some areas in Suzhou have even begun to use digital currency to issue a certain proportion of transportation subsidies.

Pan Helin, professor and executive dean of the Digital Economy Research Institute of Central South University of Economics and Law, believes that digital currency has reached the stage of opening traffic-end testing, which indicates that my country's digital currency is not far away. However, it still needs to go through a process of continuous testing and improvement before it can officially meet the general public.