Bitcoin trading: price rally, new regulations and free trade

For all those who started trading the Bitcoin before Christmas 2017, there were huge losses in April of this year: if the value at purchase was 17,000 euros, it lost around 60% in April 2018. But the signs were good that the Bitcoin in particular was recovering within a very short time. This was justified by a clear commitment by the EU to research and use blockchain technology. A partnership between 22 European states was decided on the occasion of Digital Day. Even the American stock exchange supervisory authority SEC declared at the end of March that in principle it would be prepared to allow and certify corresponding crypto currencies – however, some basic conditions would have to be fulfilled for this.

Trading in crypto currencies is becoming more and more popular

Bitcoin and CO. stand thus again and again in the spotlight of the public interest and also the trade with the crypto currencies becomes ever more popular. Ever more speculatively adjusted investors decide to enter into the trade with the crypto currencies. It is recommendable to carry out a crypto broker comparison in advance, because either a broker or a crypto exchange is needed to trade with the digital currency. Although this currency should be used for payment transactions, 95% of the currencies are currently used for speculation.

  • There are now dozens of different Exchanges and Crypto Brokers where trading in the crypto currency is possible.
  • Before the first trade is carried out, everyone should deal with the digital currency and above all with its future.
  • Because many are sure that the Bitcoin was only a bubble after the digital coin could not hold its profits after its record high of just under 20,000 US dollars at the end of 2017.
  • This weakened the crypto euphoria, but crypto expert Mike Novogratz believes that there will already be a Bitcoin rally next year.

The expert sees potential for strengthening the crypto reserve currency, especially among institutional investors. As soon as these would enter into the trade that would provide for a price rise with the Bitcoin. But also all other investors, who are at present still rather skeptically opposite the Bitcoin, could be attracted by the entrance of professional investors likewise. There are tons of exchanges, where you can buy BTC. To compare them visit and find the best one for your needs.

The storage of the coins – a difficult point

Crypto expert Novogratz sees the biggest problem with all crypto currencies as being that they are “bare instruments”. He says, “If someone takes a Bitcoin from me, it’s gone. In his opinion, storage is still too insecure, especially for large investors. The owner receives a key – a key – to access his Bitcoins. This key is located in a “wallet”, a digital purse. However the investors are dependent in the case on a offerer, to whom they entrust their Bitcoins and thus their invested fortune.

Investors have a certain nervousness about how to store their keys, according to Novogratz. There are quite a few dubious providers where the general bad reputation of crypto currencies also resonates. The solution for this problem could be an established financial organization, which the investors trust.

Everyone may trade with crypto currencies

The Court of Appeal in Berlin recently ruled that Bitcoins are not financial instruments. Thus these do not fall under the regulations of the so-called Banking Act (KWG). Should this case law prevail, then the Federal Financial Supervisory Authority (BaFin) would be the big loser, because in this case it would no longer have to be asked for permission for business models with reference to Bitcoins.

How did the ruling come about? In the third instance, the Court of Appeal heard the case of an operator of a Bitcon trading platform. According to the German Banking Act (KWG) of the BaFin, the operator did not possess a permit and for this reason the court of first instance sentenced the operator to a fine pursuant to ยง 54 Para. 1 No. 2, Para. 2 KWG. The operator appealed to the Berlin Regional Court (2nd instance) and was acquitted. As the next higher instance, the Berlin Court of Appeal confirmed the acquittal with its ruling and explained in detail why the Bitcoin does not fall under the rules of the KWG: “The Bitcoin is simply not a financial instrument. However, many of the objects of the KWG’s permits are linked to this very term.

In particular, the decision contradicts the previous view of BaFin. In one of its bulletins, the authority has so far confirmed that Bitcoins are so-called units of account and thus financial instruments. What is striking about the court’s decision is the clear words with which the BaFin is standing in its way:

Quote: “As far as the BaFin is of the opinion that Bitcoins is a complementary currency, which is to be understood under the term unit of account, it fails to recognise that it is not the task of the federal authorities to intervene (in particular) in criminal law by shaping the law”.

In other words, in the opinion of the KG Berlin, this means that BaFin has clearly exceeded its competencies with its previous approach.

Global rules for Bitcoin & Co.

The supervisory authority for the worldwide fight against money laundering intends to create a set of rules for transactions with crypto currencies. The first guidelines are to be adopted in June 2019. According to the Financial Action Task Force (FATF), the states are to use these rules to organise the supervision of Bitcoin & Co.

On this still very young market, this would be the first international initiative. So far, control by states has been handled very differently. According to the FATF, the trading platforms for digital currencies and certain providers of crypto currency accounts (wallets) will in future require a state licence. Furthermore, these will be subject to legal regulation. The same rules also apply to service providers who support companies in issuing new digital currencies, the so-called Initial Coin Offering (ICO).

The new regulations are intended to curb the use of crypto currencies for money laundering, terrorist financing and other criminal offences. The FATF has announced that countries that do not comply with the new rules will be blacklisted. This will make it more difficult for countries to access international financial markets.