Li Lin: CFTC's new positioning on Bitcoin is expected to promote compliance competition in the industry

Author: Zhong Zi Image source: Dazhi

At 2 a.m. on September 18, the Federal Reserve announced that it would maintain the key interest rate at 0-0.25%. This also triggered a sharp fluctuation in the price of Bitcoin in the past two weeks. The spot price of Bitcoin on the trading platform Huobi jumped from 1,487 yuan to 1,506 yuan. At the same time, the U.S. regulatory agency CFTC also officially defined virtual currencies such as Bitcoin as commodities on the same day, the same classification as crude oil or wheat. After the news came out, the trading volume of domestic Bitcoin trading platforms fluctuated violently again, and the trading volume on Huobi reached 30 million yuan in one hour.

Investors have long been discussing whether Bitcoin can be defined as a commodity, and the CFTC is also considering whether this virtual currency should be regulated by itself. Last year, the CFTC chairman told the U.S. Senate Committee to regulate Bitcoin derivatives. This document is also the first time that U.S. regulators have "reasonably defined" Bitcoin and other virtual currencies as commodities.

In this regard, Huobi CEO Li Lin believes that the CFTC's new positioning of Bitcoin is expected to help Bitcoin enter a new and orderly development stage and promote compliant competition in the Bitcoin industry. This positioning will also open the prelude to Bitcoin's transition from a geek concept to a mass investment product.

Now, Bitcoin futures and options are subject to CFTC regulations and supervision. If there is improper behavior such as futures market manipulation, the CFTC will be able to punish such behavior. If you want to operate a Bitcoin derivatives trading platform, then the company needs to register. Although Bitcoin and other virtual currencies are actively traded, innovation is not an excuse, and they must also comply with all commodity derivatives market rules.

Li Lin said that since the global financial market fell sharply on August 24 this year, investors' risk aversion has continued to heat up, and Bitcoin and gold are the few assets whose prices have remained at the level before the big drop. On the other hand, investors in the financial industry are accelerating their shift. According to incomplete statistics, as of July this year, global venture capital institutions' investment in the Bitcoin industry has exceeded the whole year of 2014. Bitcoin and blockchain technology, with their advantages such as anonymity and decentralized transactions, can not only promote the evolution of the global economy and develop a new industrial ecology, but they can also easily become accomplices in gray transactions and hacker crimes. Therefore, it is very necessary to position and regulate Bitcoin.