Analysis: How do countries that do not ban Bitcoin and its derivatives regulate them? (AI Translation)

【周刊提前读】分析：那些不禁止比特币及衍生品的国家是如何监管的？

In January 2024, the U.S. Securities and Exchange Commission (SEC) made a significant move by approving the listing of the first 11 Bitcoin spot exchange-traded funds (ETFs), which quickly attracted around $10 billion in net inflows, a milestone that took the first gold ETF three years to achieve. This rapid influx highlights the growing acceptance and demand for cryptocurrency-based financial products among traditional investors. These Bitcoin ETFs held approximately 180,000 Bitcoins, contributing to a global total of about 1.1 million Bitcoins held by all Bitcoin spot ETFs, representing 5.8% of the total Bitcoin supply [para. 1].

The market anticipates that these inflows will continue to absorb spot holdings gradually, positively impacting Bitcoin's spot price. This expectation comes at a time when Bitcoin miners are preparing for their fourth halving event in April 2024, which will reduce their rewards and consequently decrease daily Bitcoin issuance from about 900 to roughly 450 units. Despite potential slowdowns in new inflow rates and the halving event reducing issuance, projections still foresee a surge in Bitcoin prices [para. 2].

The introduction of Bitcoin spot ETFs has sparked diverse opinions within the financial community. Supporters view it as an evolution of financial products catering to demand-side dynamics and see Bitcoin as an innovative hedge against inflation due to its scarcity and fixed supply mechanism. They argue that cryptocurrencies offer alternatives for value storage akin to digital gold and can enhance financial system reliability by providing services to underdeveloped regions without relying on large financial institutions [para. 3][para. 4]. On the payment front, digital stablecoins are gaining traction in the United States, with significant market services now comparable to traditional banking methods. Notably, Tether's USDT has emerged as a dominant player with a substantial holding of U.S. Treasury bonds [para. 5].

However, critics raise several concerns regarding Bitcoin and its related products, including risks associated with price manipulation due to high concentration among top investors and miners; money laundering facilitated by the anonymity and decentralization of transactions; asset safekeeping challenges highlighted by incidents like FTX's collapse; and potential disturbances in cross-border capital regulation due to massive fund movements through unregulated channels [para. 6].

In response to these challenges, regulatory bodies worldwide have adopted various strategies ranging from strict regulation without outright bans to complete prohibition of Bitcoin-related activities. The U.S., for instance, has allowed participation in cryptocurrency investments through both on-exchange products like futures ETFs approved by SEC and off-exchange products such as Grayscale's compliant trust product despite concerns over market manipulation risks [para. 7][para. 8]. To address these issues further, regulatory measures have been enhanced focusing on market manipulation regulation within cryptocurrency sectors; strengthening anti-money laundering regulations particularly for decentralized finance models; and tightening oversight on cryptocurrency exchanges requiring registration or exemption compliance [para. 9].

This evolving regulatory landscape underscores efforts to balance maximizing benefits while minimizing risks associated with cryptocurrencies like Bitcoin. As this sector continues to grow and integrate into mainstream finance, ongoing dialogue between innovators, investors, regulators will be crucial in shaping its future direction.

Yao Qian emphasizes that this analysis represents personal academic views rather than official positions from any institution he is affiliated with [para. 10].