Bitcoin [BTC] received a major boost after Sa Xiao, Council Member at the Bank of China’s Law Research Association, said that it should be legal for people in China to own Bitcoin [BTC], despite the government’s ban on crypto transactions and assets.
The statement was released by @Cnledger, a notable crypto news source based out of China, and stated that Xiao believes that the “occasional exchange of Bitcoins between peer to peer in China should be considered legal.”
The statement is important with regard to China’s stance on crypto wherein the country has completely prohibited crypto-trading. The government tightened the ban in August 2018, after it requested Alipay, a widely utilized financial app, to crack down on over-the-counter [OTC] BTC trading.
Sa Xiao’s beliefs are based on the present legal framework which according to him, protects the population’s right to own virtual assets. He stated that occasional peer-to-peer trading of Bitcoin was one of the “rights of ownership” and it felt in the nature of “disposition right.” Hence, owning and occasional P2P transaction of Bitcoin and other virtual assets should be legal, he said.
However, Xiao cautioned that if an entity ran Bitcoin trading as a business and caused capital losses to its customers, there would be serious consequences against the individual, as s/he would be punishable under the criminal law of China.
The remarks made by the Bank of China representative received major attention on social media as people remained split on the statement.
Twitter user, @DolphinPay, stated,
“Nothing changed indeedly. Exchange between individuals to individuals in China still is [as has always been] legally blurred. Besides the facts, conclusions reported are legal opinions and wishful thinking. Which is not worthless, but is just a personal thought by Xiao.”
Another twitter user, @CryptoOutsource, responded,
“This is an individual’s opinion on the legal status of Bitcoin. This is not an official government position. But I do not expect the government to allow for Bitcoin to thrive as it is an excellent way to circumvent the tightening control they are applying to money.”
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Bitcoin’s on-chain/off-chain valuation indicators the key point of focus as coin heads to $13,000
With the rise in Bitcoin’s price, the rest of the cryptocurrency market has followed suit by displaying a green trend across the board. In a recent series of tweets by popular cryptocurrency analyst Adam Tache, users were informed about the top Bitcoin on-chain and off-chain valuation indicators, derived from on-chain valuation models.
The analysis touched on the Mayer Multiple created by dividing the price by the all-important – 200 day moving average. The current average Mayer Multiple stands at a figure of 1.39, which may climb higher. Looking at previous figures, the normal Mayer Multiple figures stated that if the value shoots up to 2.4, then Bitcoin eventually retraces back to a comfortable 1.5. The Mayer Multiple is usually considered as the original indicator used to clock the valuation of Bitcoin.
Another major indicator discussed in the thread was the NVT Ratio invented by Willy Woo, Partner at Adaptive Fund. The indicator is used to calculate Bitcoin’s prominence or value in the cryptocurrency space by evaluating the amount transacted on the blockchain as a “proxy for investment flow and bear and bull market cycles.”
At the moment, the NVT ratio for Bitcoin is in an abnormal region compared to the start of previous bullish patterns. The NVT ratio was above the “bear market” separator, which meant that the cryptocurrency was overbought. When Bitcoin is overbought, it usually means that the buying pressure is much higher than the selling pressure. Adam Tache opined,
“NVT signaling overbought is likely due to a number of factors — namely the proliferation of exchange-based, purely off-chain txs driving short-term price action.”
The analysis also pointed out the liveliness of the Bitcoin indicator created by Tamas Blummer. The indicator showed the inverse count of lost or ‘HODLed’ Bitcoin, while stating that when the ratio increases, long-terms holders of the cryptocurrency decrease their positions. The indicator conveyed accumulation of Bitcoin when the ratio decreased.
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