Bitcoin price plunges, Bitcoin ETF approval probability increases, outlook remains promising

On the evening of the 7th, Beijing time, Bitcoin suddenly plunged by more than $100, falling from $1,260 to $1,160 in just 30 minutes. The current decline has narrowed to 5%, back to $1,218. Although the central bank proposed the bottom line for the regulation of Bitcoin trading platforms a few days ago and established a negative list, it also stated that it would never ban them and should be tolerated. In addition, some analysts believe that the probability of the US Securities and Exchange Commission passing the Bitcoin ETF Coin proposal has risen to 50%, so the prospects for Bitcoin are still promising.

Bitcoin

From December last year to March this year, with the US dollar remaining weak, the Bitcoin market ushered in a sharp bull market, setting a new historical high in January. After a sharp decline, it fluctuated upward again and restarted the bull market.

Zhou Xuedong, director of the Business Management Department of the People's Bank of China, said on the 6th that in the short term, it is necessary to clarify the regulatory bottom line of Bitcoin trading platforms, establish a negative list, and do a good job in risk prevention and mitigation. Domestic Bitcoin trading platforms should be tolerated and not banned for the time being, leaving a period of observation, but in the short term, the regulatory red line of Bitcoin trading platforms must be clarified and strictly regulated.

This may indicate that the supervision of such products can be more flexible and market-oriented, and no longer be a unified "one-size-fits-all" approach. Furthermore, the introduction of a "negative list" indicates that as long as it does not violate laws and regulations, it does not have to be banned.

Separately, the U.S. Securities and Exchange Commission (SEC) is considering a proposal to launch an exchange-traded fund (ETF) backed by Bitcoin and will make a final decision by Saturday.

On February 14, SEC officials met with Bitcoin ETF advocates Tyler Winklevoss and Cameron Winklevoss to discuss the proposal. Analysts from well-known financial institutions, including Bloomberg, believe that due to the unpredictability of the U.S. Securities and Exchange Commission (SEC), the probability of the Winklevoss brothers' Bitcoin ETF Coin being approved is quite high.

The price of Bitcoin has risen 27% so far this year, continuing the 120% surge in 2016, and Bitcoin has become the best performing currency in the past two years. The market expects that once the Bitcoin ETF is announced, it will attract a large amount of capital investment, at least $300 million.