The bitcoin index Coindesk created shows bitcoin reached an all-time high of above $1,200 on Thursday as it has fully recovered from the correction a few weeks ago, which was assumed to have been caused by Chinese regulatory intervention. In this article, I will review the latest Chinese intervention which happened since my last article. I will also review the details about the potential Winklevoss bitcoin ETF.

My advice for investing in bitcoin is that it is a great store of value for the long term. The price should increase over time because it is deflationary and it will grow in adoption. Part of the growth in adoption will come from younger people who have grown up around technology and are more willing to trust a digital currency. Although the technology is amazing and it is much simpler to use than 5 years ago, many older people do not accept the concept of having money in a digital form not backed by any governments. Besides the aging of the population, another catalyst for bitcoin adoption would be a major currency being devalued much like what is happening to the yuan right now. If the US debt to GDP continues to increase, it could catalyze a dollar devaluation which would make people want to use bitcoin for its stability.

If you are investing in bitcoin, it makes sense to buy it in stages instead of all at once to prevent price fluctuations from hurting you. Bitcoin is difficult to sell and I don’t recommend doing so if you’re trying to time the market. Getting in and out is too difficult. I recommend buying it in increments. You should increase the amount you buy when it falls and stop buying when it rises too fast. I recommended increasing the amount you buy when it was in the $700s. Now that it’s in the $1,200s, I think halting your buying makes sense. It’s common sense to be weary of a currency that’s up 25% year to date and is at its all-time high. While I wouldn’t sell it, it’s not a bad idea to use it to buy things. It’s easy to go on a spending spree at Overstock.com when your wealth has almost tripled in 12 months. There will be another correction in the future where prognosticators claim bitcoin has died for the 20th time.

As a reminder, the Chinese government has been meddling with bitcoin for quite some time. I consider it meddling because it seems to increase pressure on the exchanges when bitcoin’s price goes up and then holds back after the price falls. It’s manipulating the price, but I no evidence that supports the speculation that the government is somehow profiting off these wild swings it causes.

I haven’t written about bitcoin for a few weeks, so the latest government action which I have not covered occurred in early February. On February 9th, 2 of China’s top 3 bitcoin exchanges, OkCoin and Huobi, announced that they were suspending bitcoin and litecoin withdrawals for one month. For those who aren’t familiar, litecoin is another cryptocurrency. The two exchanges stated that the decision was made to improve their anti-money laundering capabilities and prevent illegal transactions. Clearly this language came straight from the Chinese government as no private company would decide to hurt their customers in this way. This is the type action which comes from a country which is a mixture of communism and capitalism.

The firms stated that their platforms are going to go through an upgrade to stop money laundering, pyramid schemes, and other illegal activities. Bitcoin is a currency. You can do anything with it. It shouldn’t be up to bitcoin firms to police what is done with the currency. This is a similar situation to how Facebook is being blamed for fake news being shared on its website. Facebook is supposed to be a free platform. It’s not the firm’s fault that people share faulty stories on its website. At least in Facebook’s case the American government isn’t getting involved. However, that may not be the case in some European countries as they don’t have completely free speech. It’s lazy for the Chinese government to go after the exchanges. It should find the criminals and hold them responsible for breaking the law.

The other exchange in the top 3, BTCC, also is upgrading its internal systems like the other 2 firms. It said bitcoin and litecoin withdrawals will take 72 hours to process. The People’s Bank of China also said it would shut down exchange startups that violate its rules. If it didn’t do that, whenever a new ruling came out, customers would switch to smaller exchanges that weren’t effect by the rule.

The price decline bitcoin had because of China’s new rules was relatively small which is why I didn’t do an article on it at the time. It fell from $1,054 to $989. As you can tell, it has regained those losses and much more in the weeks following.

Personally, I am against the idea of a bitcoin ETF because there is no need to have one. Bitcoin can already be bought at small increments easily. I wouldn’t recommend buying into it. The ETF brings the need for trust back into the equation as you must trust the ETF to securely hold the bitcoin. The SEC will decide on whether to accept or reject the Winklevoss ETF by March 11th. The size of the offering is $100 million which is high considering bitcoin’s market cap is only $19 billion. The anticipation of this ETF is likely driving the price higher as it could bring more investor demand to the currency. The ETF may increase bitcoin’s coverage in the media. It also may make bitcoin more palatable to investors. This may happen if investors make money in the ETF and it increases their appetite for the real thing. Bitmex has the odds of the ETF being accepted trading on its website. Currently it’s at 49.47, meaning there’s a 49.47% chance it gets accepted by the SEC.