Beware the risks behind Bitcoin (Financial Advisor)

(Original title: Beware of the risks behind Bitcoin (Financial Advisor))

Bitcoin has been popular for several years, and its price has risen and fallen several times. Since the beginning of this year, the price of Bitcoin has soared, breaking historical records. The highest point reached $1,285.74, exceeding the price of gold per ounce, and the price fluctuates greatly in the short term. In China, the price of Bitcoin per ounce is as high as about 7,000 yuan. The scope of application of Bitcoin is also expanding. Large retail stores in some countries have begun to allow Bitcoin to be used for payment, and even developed Bitcoin mobile payment methods.

Previously, some people believed that Bitcoin is a virtual electronic currency without a bank or national credit foundation. Recently, the relevant person in charge of the central bank pointed out that Bitcoin is a virtual commodity on the Internet, not a currency, and is fundamentally different from the digital currency that the central bank is studying. Currently, Bitcoin trading platforms are often mistaken for exchanges. In fact, current Bitcoin trading platforms do not have the corresponding financial licenses and cannot be called exchanges.

China's bitcoin trading volume once accounted for 99% of the world's total, with many participants. However, the special properties of bitcoin and its dramatic ups and downs also let the market see the risks involved. As early as 2013, relevant departments warned of bitcoin risks, pointing out that there were high risks of speculation, money laundering and being exploited by criminals or organizations. Zhou Xuedong, director of the Business Management Department of the People's Bank of China, said that in fact, China's real trading volume is not particularly large, mainly because some institutions and investors create false transactions and increase business volume by brushing orders. During the recent on-site inspection, it was found that some bitcoin trading platforms have major risks: first, some institutions are suspected of engaging in financial business in violation of regulations, including leveraged trading, financing and currency lending, continuous bidding, centralized matching, etc.; second, some institutions have not yet established anti-money laundering internal control systems and measures that comply with regulations, which may be used by criminals and become a channel for money laundering. In addition, some platforms have publicity non-compliance, technical security risks and platform-related business risks.

Relevant people pointed out that for ordinary investors, the blockchain technology behind Bitcoin is not easy to understand, and its operating rules are difficult to grasp. In this case, the risk of rash investment is not small. Moreover, there are few scenarios for Bitcoin payment now, and there is no national credit support. It does not have the same legal status as currency, so you must be extra cautious when participating in buying and selling.