The future of BTC is clear

Author: Yan Zhi, COO of Ruizi Technology

Today (2017-01-11), the central bank entered the three major trading markets at the same time with great force, causing Bitcoin to plummet by 15%, and all investors were wailing. Of course, this is only the first step of the action. Given the central bank's style, it will definitely not just enter the market to scare everyone, and there should be more severe measures in the future. I believe that in the future, strict real-name system, anti-money laundering, address registration between exchanges, deleveraging, transaction fees and stamp duties may all be on the agenda. Perhaps this detail should have been drafted, and once the audit of the exchange does not find any major problems, this detail will be launched. By then, the market will still have a wave of overreaction. But is this a blessing or a curse for BTC?

First of all, it is clear that the central bank does not think that BTC is illegal. If it is confirmed to be illegal and wants to seize BTC, the behavior should be to directly unplug the network cable and shut down the transaction. Just like Ezubao, directly seize the server and all business will be immediately stopped. As of the writing of this article, all services in the three major markets are carried out in an orderly manner. Secondly, it is unlikely that the exchange will be found to have serious problems. I am very familiar with OKCoin and Huobi. The self-discipline of these two platforms is relatively strict, and they are usually cautious and treading on thin ice. Therefore, it is unlikely that one of the three major exchanges will be shut down. If the above judgment is correct, then this action is a major positive for BTC. This shows that the central bank recognizes the huge value of BTC. And is willing to promote good and suppress evil in the BTC market through laws and regulations.

After one to two weeks of inspection and confirmation that there are no problems, I estimate that management measures will be introduced, including real-name system, deleveraging, and reducing liquidity. The most likely possibility is to charge transaction fees. This measure will instantly reduce the liquidity of BTC by about half. At that time, all strategies and quantitative robots will have to be suspended and redesigned. At least 30% of the trading volume in the BTC market is supported by robots. Therefore, there will be a huge decline. After this wave of decline, I guess after a cooling-off period of about a week, there is a very high possibility that the central bank will issue licenses and bring exchanges under central bank supervision. This will be an unprecedented positive in the history of BTC.

What is the future of BTC?

These are still the things I said when I shared at OKCoin.

1. End-to-end real-name authentication, mutual registration of addresses between institutions, and strict supervision of asset flows make it the most difficult tool for money laundering.

2. BTC is transparent and medium-oriented. For users, there is no need to understand the concepts of keys, private keys, wallets, etc. It is just very convenient to obtain or pay. By the way, when Ruizi Technology distributes dividends globally in the future, when the asset dividends are deposited into the investor's account, the process of the investor getting the money is a process from legal currency to BTC and then back to legal currency. Users do not need to care about this circulation process using BTC as a medium.

3. BTC service, various operations required in the financial field, including account services, hedging, fund custody, mortgage and other services. In a word, all existing financial services must be established by BTC institutions, so that traditional financial institutions can enter. At present, there are 3~4 large hedge funds around me that are observing the digital currency market. However, they cannot enter the market due to the lack of fund custody and compliance means. Once supervision is gradually established, the entry of a large number of financial institutions will bring about a further rise in BTC prices.

Therefore, everyone can temporarily avoid this big drop, and the market may have several more big drops. However, as long as the market does not collapse, everything will start from this event and get back on track.