Bitcoin breaks through $30000! The risk behind the sustained rise can not be ignored

Source: 21st century economic report original title: the first time in history! Bitcoin breaks through $30000! The return on investment in half a month is as high as 50%, and the risks behind the sustained rise can not be ignored. On Saturday night, bitcoin broke through $30000 for the first time in the history of bitcoin, and its market value surpassed that of Berkshire, a stock god. On December 16 last year, bitcoin just broke through $20000, and investors have achieved a return of up to 50% in just half a month. In 2021, bitcoin mania continues! Beijing time (January 2) Saturday night, bitcoin broke through $30000 for the first time in history! Once again, it reached a record high of nearly 31000 U.S. dollars, with a market value of more than 550 billion US dollars, while the latest market value of Berkshire owned by Buffett was 543.7 billion US dollars. (bitcoin approaches $31000, source: wind) it’s worth noting that bitcoin just broke through $20000 on December 16 last year, and investors have achieved a return of as high as 50% in only half a month. In March 2020, the price of bitcoin once fell below $5000, but it has regained its upward momentum recently. In December last year, the price of bitcoin rose by nearly 50%. Some analysts believe that bitcoin price rise is a strategy for investors to hedge against the weakening of the US dollar. But at the same time, some analysts believe that there has been speculation in the cryptocurrency market, and the action of the regulatory authorities may be the main uncertainty facing the market this year. The recent year’s rise in bitcoin has been driven by many factors, including the entry of institutional investors, the global central bank’s easing policy, the limited number of bitcoin, and the market frenzy triggered by the breakthrough of $20000. The risk behind the sustained rise can not be ignored While bitcoin / Tutu has been soaring in succession, rational voices still appear in the market from time to time, warning that speculation is behind the excessive rise. “You can buy stocks like Amazon or stocks like apple, and you know what you’re buying,” says Dennis Dick, a trader at Bright Trading LLC. But bitcoin is actually just some numbers on the screen, and investors want others to think that the value of bitcoin is more than the price they pay, so it’s pure speculation. ” Stock market Warren Buffett has also been less optimistic about cryptocurrencies, believing that there is a bubble in them: “I can almost certainly say that they will have a bad ending. Buying bitcoin is not investing, you are speculating. If you want to bet that someone will follow the investment and pay more, it’s a game. It’s not an investment. “ Meltem demirors, Chief Strategic Officer of coinshares, a Tucson asset management company, warned that in the future, the cryptocurrency industry may be subject to more scrutiny and stricter supervision. Bitcoin is still an unstable asset, and there will be great risks if you invest in it. Bitcoin PK gold anti inflation “safe house” coefficient which strong? In the era of zero interest rate or even low interest rate, crypto digital currency including bitcoin is temporarily used as an investment asset to “hedge against inflation”. When bitcoin is in high light, its investment price and trend have attracted more and more attention of investors. Gold has been playing the role of a safe house for a long time, but investors are expected to significantly enhance the anti inflation safe house function of the special currency. Under the new situation of dismantling safe house coefficient, the scale of fiscal stimulus of central banks is unprecedented, including the latest round of stimulus plan with a scale of 900 billion US dollars approved by two houses of Congress with high votes. Under this ultra loose monetary policy, global inflation expectations have risen, and the market demand for anti inflation assets has increased significantly. “In the period of great economic fluctuations, digital and cryptocurrencies tend to receive more attention.” Yu Jianing believes that the rise in the price of bitcoin is essentially the dividend of the global digital cycle. With the rapid development of global digital economy, the technological evolution and innovative application of blockchain are also accelerating. “The demand for blockchain infrastructure will directly drive the demand for corresponding digital assets, and then drive up the asset price. Bitcoin is the “general equivalent” of digital assets. Therefore, the increase in demand for blockchain platforms and digital assets is expected to lead to the price of bitcoin. ” Yu Jianing said. In addition, blockchain digital assets such as bitcoin have gradually attracted the attention of mainstream investment institutions this year, and have begun to accelerate the integration with the mainstream financial system. Back in October 2019, PayPal Holdings Inc. said it would allow customers to use cryptocurrency. PayPal announced again in November that it would allow customers to buy, sell and hold bitcoin and other cryptocurrencies online, and that from early 2021, its customers would be able to use cryptocurrency to shop with 26 million merchants on its network. Online auction market eBay is working with lolli, a cryptocurrency centric shopping app, to integrate bitcoin rewards for its 127 million users. DBS also launched bitcoin and other digital asset trading services to institutional investors in November this year. With the help of DBS digital exchange, a digital exchange supported by DBS, enterprises and investors can now tap into the digital currency market with an integrated solution ecosystem. Behind the “money hoarding” of institutions The future risks of bitcoin are also being hotly discussed while more attention is being paid to graph / worm. Although gold’s performance in 2020 is slightly inferior to bitcoin, it is different from high-risk cryptocurrency. Xu Kun, director of China blockchain Application Research Center, told 21st century economic reporter that bitcoin’s rise was driven by the admission of overseas institutional investors. “On the one hand, more and more overseas investment institutions have incorporated bitcoin into their portfolios. For example, ruffer, a British investment management company with a management scale of more than 20 billion euros, holds about 2.5% of bitcoin assets in its multi Strategies Fund. On the other hand, some listed companies have also started to use bitcoin as part of their asset reserves, and MicroStrategy now holds more than 70000 bitcoins. ” In Xu Kun’s view, bitcoin is an inevitable trend. “In the context of global quantitative easing, the scarcity of bitcoin and its low correlation with traditional assets make it a better choice for institutions to diversify investment risks and enhance investment returns, and gradually replace gold as a new reserve asset. At present, the market value of bitcoin is less than one tenth of that of gold. With the admission of more institutions aiming at asset allocation, there is still a lot of room for growth in the value of bitcoin. ” However, she also said that bitcoin is still very small in size, and it needs 10 times more growth space to reach the same size as gold. With a large number of institutions for asset allocation starting to “hoard money”, bitcoin has actually entered a deflationary state. The founder of skybridge capital believes that there is a risk of a sharp fall in bitcoin, which may suddenly plummet by 20% to 50%, so investors must be very cautious. A bitcoin investor told reporters that he recently paid less attention to cryptocurrencies such as bitcoin. “These two months have gone crazy. I’m going to stop and wait for a while.” It is worth noting that since its market value reached $1 billion in March 2013, bitcoin has experienced two cycles of soaring to an all-time high, followed by a cycle of more than 80% decline in value. Bitcoin plummeted in 2017 after a sharp rise. After hitting a record high of $19783 in December 2017, bitcoin then fell 29%, once as high as 38%. On the 31st day after the peak, bitcoin fell below $10000, falling nearly 50% from its high point. For the next two years, its price remained ultra-low. From January to early October this year, bitcoin hovered at a relatively low level of 7000-11000. Since October, bitcoin has risen from $10731 at the beginning of the month to more than $28000. Over the past week, it has changed by about $5600. Song Jiaji, a blockchain researcher at Guosheng securities, told reporters of the 21st century economic report that there may be several preconditions for the lower interest rate compared with the special currency. “First, the lower interest rate means that the yield of risk-free assets decreases and the attractiveness of risk assets increases; second, multiple defaults reduce the attractiveness of fixed income financial assets and increase the attractiveness of equity assets; finally, bitcoin is regarded as equity like assets. If these premises are true, there may be room for bitcoin prices to rise. ” However, if bitcoin ETF is not approved by the US Securities and Exchange Commission (SEC), the listing of cryptocurrency exchanges such as coinbase and the purchase of bitcoin by listed companies are hindered, the price of bitcoin will be under pressure, said Song Jiaji’s team.

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