The currency circle once again staged ups and downs.
On the afternoon of September 26, Huobi Global, one of the world’s largest trading platforms for virtual currency transactions, issued an announcement stating that in response to relevant regulatory requirements, the registration of new users in Mainland China will be suspended on September 24, 2021.
At the same time, the virtual currency trading platform Binance also stopped user registration in mainland China.
Large cryptocurrency exchanges have begun to adjust their businesses, and some small and medium-sized platforms have chosen to stop operations. For example, on September 25, the trading platform BHEX announced the permanent closure of the platform and settlement.
Many cryptocurrency trading platforms have adjusted adjustments. Why is this? The answer is that the regulators have retaken action.
On September 24, ten departments, including the Central Bank and the Supreme People’s Procuratorate, issued a notice to attack illegal business activities of virtual currency. On the same day, ten departments, including the National Development and Reform Commission, the Ministry of Industry and Information Technology, and the Ministry of Public Security, jointly issued a document to rectify virtual currency “mining” activities.
After the central bank rectified encrypted transactions, currencies such as BTC, ETH, Binance, and Ripple fell sharply across the board, with declines of 3.56%, 7.93%, 7.64%, and 7.4% respectively within 24 hours.
Since mid-May, ten ministries and commissions, including the Central Bank and related agencies, have issued 12 regulatory policies against virtual currency mining and trading.
From a global perspective, cryptocurrencies are subject to strict supervision in many countries.
In recent weeks, the United Kingdom, Italy, Germany, the Netherlands, Japan, and other countries have banned the world’s largest cryptocurrency exchange Binance from offering certain cryptocurrency investment products; South Korea has stepped up its efforts to combat tax evasion using digital currencies; the United States Securities and Exchange Commission is new Chairman Gensler also expressed the need to strengthen the supervision of cryptocurrencies and investor protection.
Nevertheless, entering October, Bitcoin once again soared.
On October 5, BTC rose by 2.8% to $50,354; on October 7, BTC rose by 5% to $54,079, approximately $9,331 lower than its historical high in mid-April.
In the past seven days, after hitting the highest level since May. In addition, ETH, Binance, and Dogecoin have all risen sharply in the past seven days.
Encrypted digital currency is difficult to implement fully.
Regarding cryptocurrency showing such strong momentum, some analysts believe that cryptocurrency as an asset class seems to be increasingly recognized on Wall Street; in addition, the remarks of US regulators alleviate people’s concerns about stricter supervision.
So, does this mean that cryptocurrency has ushered in a new glorious moment? How do we understand the inner logic of the ups and downs of cryptocurrency?
With the advent of the digital economy, the form of currency has shown electronic characteristics. The power of currency will also be transferred from the country to the digital world.
In the context of the significant era, this phenomenon is caused by the rise in the weight of the state machinery. In the next era, whether it is based on the security considerations of the state power, or based on the country’s economic interests or the restraint and convergence of multinational corporations and capital, the weight of the state machinery will rise and enter its heyday.
The original intention of digital currency was to break free from the fear of inflation caused by currency oversupply under the central bank’s monopoly. After all, if digital currency is to avoid the deflation curse of the gold and silver era, the total market value must exceed the gold market value of at least 7.4 trillion US dollars, which means that the price of a single bitcoin is much higher than 400,000 US dollars.
Who can resist such a crazy temptation to add value? As a result, the role of technology has been overly mythological, and financial value has been expanded by constantly being given more stories and concepts.
In the meantime, numerous cryptocurrencies even played the function of financial derivatives.
In this sense, the nature of currency and its built-in financial derivative functions have long been determined. At least the contemporary currency form is difficult to evolve the optimal solution and economic changes and civilization changes.
So, does the global regulatory authorities’ suppression of encrypted digital currencies mean that encrypted digital currencies will eventually withdraw from the stage of history?