With good news coming one after another, is Bitcoin going to be popular again?

Bitcoin, which was once popular and popular all over the world, has faded from the public eye for a long time as the market took a sharp turn for the worse. However, good news has come one after another in the Bitcoin market recently, giving hope to those who stick to Bitcoin. Will Bitcoin become popular again?

Bitcoin is considered a commodity

In April this year, the payment platform PayPal announced that it would allow all its partners to support Bitcoin payments; on May 19, the New York Stock Exchange officially launched the Bitcoin Index. Earlier, the United States already had licensed exchanges, and major companies such as Dell, Microsoft and Rakuten America also announced support for Bitcoin payments.

Last week, the U.S. Commodity Futures Trading Commission (CFTC) released a document that for the first time properly defined Bitcoin and other virtual currencies as commodities, the same as crude oil or wheat. This means that Bitcoin futures and options must comply with CFTC regulations and be regulated, and trading behavior must comply with all commodity derivatives market rules. If improper behavior such as market manipulation occurs, the CFTC will be able to punish such behavior. Industry insiders believe that this shows that U.S. officials have recognized the value of Bitcoin, and this innovative virtual currency has the same status as commodities such as crude oil and wheat, but at the same time it has also dispelled the idea of ​​classifying virtual currencies as securities.

The first ETF in the U.S. invests in Bitcoin

A U.S. ETF management company purchased Bitcoin assets for the first time last week, and the value of Bitcoin as an alternative investment asset has once again attracted attention.

On September 15, ARK Network X.0 ETF, an internet-themed fund under the US ETF management company Ark Invest, purchased Bitcoin assets for the first time - Bitcoin Investment Trust (GBTC). This is also the world's first ETF to own Bitcoin assets in some form.

It is understood that ARK's Network X.0 ETF focuses on investing in disruptive companies that change the economy, including mobile Internet and localized Internet technology development. The Bitcoin assets invested in this ETF are over-the-counter Bitcoin investment trusts, and the asset value is calculated based on the valuation of the trust at 4 pm every day.

“We believe in the value of Bitcoin as a currency and an electronic platform, and now is an appropriate time to buy Bitcoin,” Cathie Wood, founder and chief investment officer of ARK, said in a statement.

However, industry insiders recommend that investors carefully read the details of this ETF, which has the trading code "ARKW", because the details of this ETF may be different from what everyone imagines.

First, it is not investing in Bitcoin alone. Despite its claims, Bitcoin is only a small part of its investment, and it is not investing in actual Bitcoin, but in a company that most people have never heard of, the Bitcoin Investment Trust. The company began trading on the pink sheets in May under the ticker symbol “GBTC.” It has a market cap of less than $40 million and very little trading volume. In addition, the investment does not reflect the true price of Bitcoin, as the Trust’s stock price has risen and even soared, while the underlying price of Bitcoin has remained calm.

Experts believe Bitcoin has a bright long-term future

Do these recent good news indicate a turning point for Bitcoin prices? Some analysts believe that Bitcoin is still only seen as a speculative asset. The intensification of global market turmoil and the trend of funds flowing to more stable and less risky investment areas may also have a negative impact on Bitcoin prices. However, the fact that institutions have begun to invest in such assets also shows that Bitcoin may have investment value in the long run.

Financial columnist Xiao Lei believes that Bitcoin will not be too popular in the future, but it may become the focus from time to time. Once there is a stock market shock, commodity shock, or geopolitical crisis, it will affect the trend of Bitcoin. For example, from past experience, when the stock market is doing well, the price of Bitcoin will fall sharply, and funds in the Bitcoin market may continue to flow out. When investing in Bitcoin, you must pay attention to the risk of volatility in the short term.

Xiao Lei said that Bitcoin has no unified definition in the world now. Some countries define it as electronic currency, while others define it as a commodity. Therefore, from the current perspective, Bitcoin will not be as popular as it was at the beginning. However, in the long run, the prospects are promising.

Currently, 80% of Bitcoin transactions are completed in RMB

Chinese speculators have now become one of the main players in Bitcoin. In March this year, Goldman Sachs wrote in a report on the future of currency that "80% of Bitcoin transactions are currently completed in RMB."

As a new commodity or currency trading medium, the trend of Bitcoin in the past two years can only be described as "a sharp decline". Bitcoin was created in 2009, and later many Bitcoin trading platforms appeared in China. In just three months from September to November 2013, the price of Bitcoin rose from 800 yuan to 8,000 yuan. On December 5, 2013, the central bank and five other ministries and commissions issued the "Notice on Preventing Bitcoin Risks". On that day, the trading volume of Bitcoin increased, and the price fell to between 5,000 yuan and 6,000 yuan. Ten days later, news that the central bank banned third-party payment institutions from settling Bitcoin transactions continued to appear, and the price of Bitcoin quickly fell sharply to around 2,000 yuan. Since then, the Bitcoin market has become weaker, and it fell to 1,000 yuan per unit in January this year. In the first half of this year, it has been hovering around 1,500 yuan, without a major breakthrough. In mid-July, as the Greek crisis worsened, the price of Bitcoin saw a wave of rapid increases. In the days after July 10, the price of Bitcoin rose from 1,700 yuan per unit to 2,222 yuan per unit. Then, due to the new agreement reached between Greece and the eurozone, Bitcoin continued to fall. As of yesterday, the spot price of Bitcoin in RMB was around 1,465 yuan per unit, less than 20% of the peak price of 8,000 yuan.