The lines between traditional finance and blockchain-based finance are increasingly blurring. Now is a pivotal moment for Taiwanese stock investors to enter the cryptocurrency market. Beyond the official launch of Bitcoin spot ETFs in the United States, asset management firms like Grayscale and BlackRock have introduced funds incorporating Bitcoin. Additionally, Taiwan's "Virtual Asset Service Provider Association" has been formally established, reflecting shifting attitudes among financial institutions and regulators.
Bitcoin is not only valuable but is also recognized as a "new asset class." The financial applications of cryptocurrencies are not fundamentally different from existing financial concepts—finance remains finance, but the tools and assets available have become more diverse and abundant.
The Era of全民 Bitcoin Investment Is Here: 3 Major Shifts
The subprime mortgage crisis that originated in the United States in 2008 triggered a global financial tsunami. Many trusted banks and financial institutions faced bankruptcy, revealing the fragility of centralized financial systems.
Bitcoin emerged in this context. The anonymous figure Satoshi Nakamoto published the Bitcoin whitepaper, "Bitcoin: A Peer-to-Peer Electronic Cash System", introducing the concept of a decentralized digital currency and payment system.
Satoshi's initial design aimed for Bitcoin to become a new globally accepted currency, countering the vulnerabilities of centralized finance. Although the vision was ambitious, few recognized Bitcoin's value initially. Its anonymous and decentralized nature led to misuse in dark web transactions and scams.
Legally, only El Salvador in Central America has adopted Bitcoin as legal tender. As analyzed by the compliance team at XREX, most regulatory bodies apply traditional financial controls to cryptocurrency investments to prevent fraud and market manipulation. Countries optimistic about crypto development classify digital assets as commodities and collaborate with private enterprises to combat tax evasion and money laundering.
According to Satoshi's design, only 21 million Bitcoins will ever exist. Due to its scarcity and value storage function, similar to gold, it is often called "digital gold." The Industrial and Commercial Bank of China (ICBC) praised Bitcoin in a June analysis report for its scarcity, likening it to digital gold. Former Central Bank Governor Perng Fai-nan noted as early as 2013 that Bitcoin resembles a precious metal.
However, Bitcoin's value has faced criticism over the past 16 years. Bill Ackman, CEO of Pershing Square Capital Management, once condemned Bitcoin as having no intrinsic value and vowed never to invest. But in March 2024, he reversed his stance, stating he would consider buying Bitcoin.
Is Bitcoin truly valuable? Is it a legitimate "new asset class"? Should Taiwanese stock investors enter the market? The answers become clear when examining these three shifts in financial institutions and government policies.
Shift 1: Accessible Bitcoin Investment Through Stocks, Funds, and ETFs
A landmark development occurred in January 2024 when the U.S. Securities and Exchange Commission (SEC) approved the first regulated Bitcoin spot ETFs in the United States. This allows ordinary investors to participate in crypto finance through ETFs.
The latest progress is that on July 23, the SEC officially approved seven Ethereum spot ETF applications, which began trading the same day. As early as April, Hong Kong's Securities and Futures Commission approved three Ethereum spot ETF products, which listed on the Hong Kong Exchange on April 30.
Beyond Bitcoin and Ethereum "spot" ETFs, there are indirect ways to hold cryptocurrencies. Asset management companies like Grayscale and BlackRock offer funds with Bitcoin allocations. Additionally, tech company MicroStrategy holds 1% of the global Bitcoin supply; buying its stock is an indirect Bitcoin investment.
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Shift 2: Financial Institutions Investing in Bitcoin and Building Trading Platforms
According to Bloomberg, multinational banking giant Standard Chartered is planning to create a trading platform supporting Bitcoin and Ethereum, making it easier for institutional investors to purchase these major cryptocurrencies.
In a 13F filing with the SEC in May, Europe's second-largest bank, BNP Paribas, disclosed investments in BlackRock's Bitcoin spot ETF. Even the US retirement fund GRP, managing over $100 billion, announced in May that it holds positions in all seven Bitcoin spot ETFs. Retirement funds typically pursue conservative, long-term stable returns, so GRP's entry is highly symbolic, signaling Bitcoin's move into the "mainstream asset" category.
Shift 3: The Era of Regulation: Investor Rights Protected
Investor rights are now better protected. Taiwan's "Virtual Asset Service Provider Association" was officially established on June 13, marking the crypto industry's entry into a new era of regulation. Starting with self-discipline, the public and private sectors are collaborating on self-regulatory norms, paving the way for operator registration, special legislation, and even licensing.
Within the next year, Taiwanese investors will be able to invest in cryptocurrencies in a relatively safe and compliant environment. Operators must undergo financial inspections and audits by the Financial Supervisory Commission, similar to traditional banks and financial institutions, ensuring services meet strict standards and provide greater user protection.
The Time for Taiwanese Stock Investors to Embrace Cryptocurrency Is Now
From an international perspective, Bitcoin is not only valuable but also a recognized "new asset class." As XREX co-founder and revenue officer Winston Hsiao stated on the "Today's Big Ears" podcast: "In our lifetime, including my grandparents and children, I don't think there will be a second chance to witness the birth of a new asset class (referring to virtual currencies). This is very, very rare... Because it is so extraordinary, everyone should pay more attention."
The developments in the cryptocurrency industry over the past six months convey an important message: from individuals to large institutions, there is a desire to invest in cryptocurrencies without altering existing financial操作 models. Whether packaging Bitcoin as an ETF or Standard Chartered's planned trading platform, the goal is the same.
From a chaotic, unregulated era to a合法合规 regulatory era, the financial applications of cryptocurrencies are no different from existing financial concepts. Finance is finance, but the tools and assets have become more diverse. This is why familiar financial products and institutions are embracing cryptocurrencies in their own ways. 2024 is the key moment for Taiwanese stock investors to enter the cryptocurrency market.
Frequently Asked Questions
Q: How can I start investing in cryptocurrencies as a beginner?
A: Beginners can start by researching reputable exchanges, understanding basic terms like Bitcoin and Ethereum, and considering low-risk options such as ETFs or funds that include crypto assets. It's essential to start small and diversify investments.
Q: Are cryptocurrency investments safe given market volatility?
A: While cryptocurrencies are known for volatility, adopting strategies like dollar-cost averaging and focusing on long-term holdings can mitigate risks. Regulatory advancements and institutional adoption are also making the market more stable.
Q: What role do regulators play in cryptocurrency investments?
A: Regulators ensure market integrity, protect investors from fraud, and promote transparency. Compliance with regulations, such as those emerging in Taiwan, helps create a safer environment for participants.
Q: Can I invest in cryptocurrencies without buying them directly?
A: Yes, indirect investment options include buying stocks of companies holding Bitcoin (e.g., MicroStrategy), investing in crypto-focused ETFs, or purchasing shares in funds that include digital assets.
Q: How does cryptocurrency fit into a traditional investment portfolio?
A: Cryptocurrencies can offer diversification and potential high returns, but they should be balanced with traditional assets like stocks and bonds. Allocating a small percentage (e.g., 1-5%) is a common strategy.
Q: What is the significance of Bitcoin being called 'digital gold'?
A: Like gold, Bitcoin is scarce and serves as a store of value. Its decentralized nature and limited supply make it attractive as a hedge against inflation and economic uncertainty.