What Are Cryptocurrencies And How Do They Differ From Traditional Financial Instruments?

The U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have been at odds over the past few months as each agency weighs whether cryptocurrencies are commodities or titles.

The SEC has argued that cryptocurrencies are commodities, while the CFTC believes they are more like securities – a stance that has caused confusion among crypto investors and entrepreneurs. To better understand how these two agencies view crypto, it is important to know what they actually do and why they are important to investors.

What are goods?

The SEC defines a good as any good that can be used to produce another good or service; It is not necessary for commercial or investment purposes only. The CFTC does not consider cryptocurrencies a commodity because they are not produced in large quantities by companies or institutions but only exist online or in small pools known as mining pools.

Goods are traded on the open market, where buyers and sellers meet face-to-face; Retail investors cannot trade these products themselves and must instead rely on brokers or agents to process trades on their behalf. Bitcoin is not considered a commodity because there is no physical commodity