Bitcoin upgrade to commodity tradable traders don't seem so happy

     According to Bloomberg, the Commodity Futures Trading Commission (CFTC) has ruled that Bitcoin is a commodity.

     This means regulators can now bring charges against people who illegally buy and sell digital currency futures and options.

     “While many people have great interest and expectations in Bitcoin and other virtual currencies, the same rules that apply to participants in commercial derivatives markets apply, and innovation cannot be used as an excuse for illegal behavior,” said Etan Gorman, CTFC’s policy executive director, in a statement.

     Does this ruling change the fundamental nature of Bitcoin and the way its advocates develop and use it? We consulted several leading figures in the Bitcoin community, and they have different opinions on the future of Bitcoin.

Developer: 'Odd ruling that will be questioned'

     "Since financial innovation is not common in the United States , many regulators who want to make a ruling on every new thing often have nothing to do. For this reason, they can't help but get involved when they have a rare opportunity, especially in California. I am not particularly surprised or worried about this ruling. I think the CFTC's reasoning is not sufficient, but it is just a creative reinterpretation of the word "commodity". The CFTC's ruling will be challenged in court, and the judge will rule based on common sense, just like the ruling in the Silk Road case, that Bitcoin should be a currency."

                                     —Mike Hearn, Bitcoin-focused software developer

Researcher: 'Don't take it out of context'

     “This ruling is obviously very important to US bitcoin futures trading platforms, but its impact cannot be overstated. Last year, the UK tax authorities ruled that bitcoin is a currency, and a Japanese judge ruled last month that bitcoin is not property. These rulings are only made for specific purposes, but they are often taken out of context.”

                                    — Willy Ledonvirta, Research Fellow at the Oxford Internet Society

Bitcoin exchange founder: 'This ruling will force related companies to leave the United States'

     “In the U.S., many regulators view Bitcoin in their own way and arbitrarily issue so-called rulings or guidance. For example, the New York State government believes that Bitcoin is a currency. This is not a wise move. If this ruling does have an impact, the relevant companies will withdraw from the United States. Bitcoin has many uses - sometimes it is traded as a commodity, but it can also be used as a currency or technology.”

                                — Grace Grobler, founder of iceCUBED Bitcoin exchange

CEO: 'Regulators need to work together'

     “Regulators need to work closely with each other and the Bitcoin industry to resolve the issue, but the CFTC seems to have done neither. If the CFTC wants to work with these companies, simply declaring a platform offering Bitcoin options illegal will not help. In the UK, the situation is very different, and the Treasury, the Financial Conduct Authority (FCA), and the Revenue (HMRC) work very closely with the top Bitcoin companies. So far, the UK government has not made any so-called rulings. That being said, I would rather Bitcoin be recognized as a commodity because commodities are the least regulated.”

                                —Mark Lamb, CEO of Coinfloor Bitcoin Exchange

Academics: 'Very cautious action'

      “As a currency, Bitcoin is terrible — namely, its highly deflationary nature. As a commodity, Bitcoin is OK, but it’s basically like selling real estate on the moon , lacking in intrinsic value. I admire the ability of speculators to make money selling Bitcoin, but I think calling Bitcoin a commodity is an understatement, it’s basically a shadow asset.

     It would be a mistake for the CFTC to issue a ruling that would allow Bitcoin advocates to trade it in a different light. Therefore, it is prudent to classify Bitcoin as a relatively less controversial commodity rather than a currency or other financial asset.”

                               —Stephen Kinsella, senior lecturer in economics at the University of Limerick

Entrepreneurs : 'Following the rules will incur costs'

     “If you use Bitcoin as a remittance tool, you will be disappointed. But if you look at it as a business, this ruling gives you a predictable framework. However, a lot of the value proposition of Bitcoin is tied to noncompliance. Add in the costs of complying with the rules, and can Bitcoin companies remain competitive?

     Regulation of Bitcoin is necessary but has come too soon, and that’s the fault of the federal system. If you’re in England, regulators can easily meet with the chancellor, central bankers, and Bitcoin company executives. But in the US, the lack of coordination between different agencies is dizzying.”

                          —Preston Byrne, Co-Founder and COO of Eris