Economist of Evergrande Group: Insufficient Supervision is An important External Factor Driving Bitcoin Price Up

Abstract : The sufficient supervision and the sluggish legislation had provided a loose environment for speculation.

ChainDD
ChainDD

Jan 08

The Economic Daily recently commented that, from the perspective of the identity of Bitcoin market entrants, the players behind Bitcoin have changed from retail investors such as technicians and blockchain enthusiasts to global financial institutions. The giant institutions have brought enthusiasm and confidence to the market and pushed up the price of Bitcoin.

In addition, data shows that as of December 30, 2020, the global supply of bitcoins has exceeded 18.58 million, which means that there are less than 3 million Bitcoin to be "mined". 

On the other hand, Ren Zeping, the chief economist of Evergrande Group, said that insufficient supervision was an important external factor that drove up the price of Bitcoin. There was a large difference in the degree of financial market development, central government power, and investor conservativeness all over the world. Moreover, different countries had different attitudes to regulate Bitcoin. So the sufficient supervision and the sluggish legislation had provided a loose environment for speculation. 

However, many experts have warned people that Bitcoin was a large bubble, which had strong volatility and high risk. Therefore, people should not buy Bitcoin blindly. It would also increase leverage or risk of liquidation. 

At present, the Bitcoin transaction activity is still drifting in a gray area. With the development and launch of legal digital currencies in various countries in the future, the rules or pressure on virtual currencies will increase, and the investment space of Bitcoin will be greatly compressed.

Some experts also said that there is no endorsement by a credible country or organization for Bitcoin. There isn't any backed physical asset for Bitcoin. Bitcoin may be worthless when a sovereign state declares that it is illegal.

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