first level title

First of all, we need to clarify what is the difference between securities and commodities?

Securities refer to financial instruments such as stocks, bonds, derivatives, etc., which represent the ownership or debt relationship of an organization or entity. They are usually regulated by state authorities, and companies are required to comply with strict auditing and disclosure requirements to protect investors.

A commodity is a naturally occurring, fungible substance or product such as gold, oil, grains, raw materials, etc. Fluctuations in commodity prices usually depend on the balance of supply and demand, climate change, international factors, etc., and are not affected by internal factors such as company performance like the securities market.

As far as investors are concerned, both securities and commodities have their own advantages and risks. Securities markets may be more suitable for those looking for a long-term investment strategy as they offer the potential to be able to earn returns from dividends, dividends and appreciation. Commodity markets are more suitable for those looking for a short-term investment strategy, as these markets are more volatile but generally do not provide income in the same way. At the same time, both markets require adequate forecasting and research in order to make sound investment decisions.

The difference between securities and commodities for investors

• risk level

Commodities tend to be more stable than securities, but returns can also be lower than securities. In contrast, investing in securities such as stocks is generally riskier, but returns can be higher as well.

• profit opportunity

Investing in commodities is often based on supply and demand and market trends, so you can benefit when their prices rise. Investing in securities can be profitable through capital appreciation, dividends, and other income opportunities.

• funding needs

Investing in commodities or other physical property usually requires more capital because of the need to purchase and store these assets. Buying securities usually requires only commissions and other transaction costs.

• investment cycle

Investing in commodities generally requires a longer holding period, and frequent trading over a short period of time may not work well. In contrast, securities investments may be realized in a shorter period of time, can be traded within the day, and are more flexible.

• Regulatory system

first level title

Are cryptocurrencies securities or commodities?

The cryptocurrency market currently lacks clear regulatory provisions, so there are still controversies and uncertainties, and there is no clear answer to the classification of whether cryptocurrencies are securities or commodities. However, we can look at different changes from the past:

• Commodities: According to the U.S. Commodity Futures Trading Commission (CFTC), Bitcoin and other cryptocurrencies can be considered commodities because they are tradable assets that hold value and help diversify a portfolio.

• Securities: The U.S. Securities and Exchange Commission (SEC) says certain cryptocurrencies may be considered securities if they satisfy the four elements of an investment deed, namely, “the investor’s money, the joint venture, the investor’s expectation of profits, and those profits Efforts from third parties". For example, tokens issued by Initial Coin Offerings (ICOs) may be considered securities.

first level title

What will happen if FIL is deemed a security by the SEC?

First of all, from a legal point of view, if FIL is recognized as a security, its use and transaction must comply with the regulatory requirements of the SEC. In the short term, it may cause speculative selling pressure and cause the price to plunge, but in the long run, it will help protect the interests of investors and enable them to understand their rights, obligations and risks more clearly

From an investment point of view, if FIL is recognized as a security, only investors who meet the SEC's definition of qualifications can buy it. This may exclude a subset of ordinary investors, making the cryptocurrency unavailable to them. However, correspondingly as a security, FIL issuers need to disclose corresponding document reports and major information disclosures, thereby increasing the degree of disclosure of their financial status and business, and investors can also get more information to infer the performance of FIL prices and possible returns wait.

Furthermore, everyone is concerned about the liquidity of FIL. If the SEC determines that FIL securities are clear, under the supervision of the SEC, the number of FIL exchanges or OTC market transactions will no longer be limited by individual legal regulations, so it is possible to obtain The market recognition from the broad audience, which in turn increases transaction liquidity, is also a prosperous situation after ordering out of chaos, and the right path after getting out of the fog and swings.

"Statement: According to the "Notice on Further Preventing and Dealing with the Risk of Hype in Virtual Currency Transactions" issued by the central bank and other departments, the content of this article is only for information sharing, and does not promote or endorse any business and investment behavior. Readers are requested to strictly abide by the laws of the region Regulations, do not participate in any illegal financial behavior』

Article Source

"Statement: According to the "Notice on Further Preventing and Dealing with the Risk of Hype in Virtual Currency Transactions" issued by the central bank and other departments, the content of this article is only for information sharing, and does not promote or endorse any business and investment behavior. Readers are requested to strictly abide by the laws of the region Regulations, do not participate in any illegal financial behavior』