Bitcoin hit an all-time high of $30000, up nearly 60% last month, with a market value of $550 billion, surpassing that of Berkshire, which is owned by Warren Buffett

Source: Internet Financial Telecommunications, January 2, 2021, the day after the opening of the new year, the price of bitcoin has crossed the $30000 mark with a market value of more than $550 billion. Since the price of bitcoin broke through US $20000 on December 16, it has soared and broken historical records repeatedly. It closed above $29000 at the end of 2020, hovered for many days, and then reached a historical high of $30000 at the beginning of 2021. It took only half a month for bitcoin to go from $20000 to $30000. Bitcoin returned to $10000 at the end of July 2020, and has hovered between $10000 and $12000. In late October, bitcoin broke the psychological barrier of 12000 US dollars. In November, bitcoin broke through the $14000 to $19000 round mark, and hit $20000 the next month. In less than half a year, the price of bitcoin has tripled. Bitcoin was born in January 2009. On November 29, 2017, the price of bitcoin broke through US $10000 for the first time, and climbed to the level of US $20000 on December 19 of that year. Bitcoin prices on some exchanges exceeded $20000. Since then, bitcoin prices have plummeted. On February 1, 2018, bitcoin prices fell below five figures and fell below $4000 at the end of the year. In April 2019, the price of bitcoin went up all the way, climbing above $12000 in July, falling below the $8000 mark in late September, and then floating between $7000 and $9000. Since 2020, the price of bitcoin has broken through the 10000 yuan mark in February, and dropped to $4000 on the 13th of the next month. After August, it has basically been above $10000. It has broken through the price barrier one by one in November, approaching $20000. Compared with the lowest price in the year, it has increased by more than 300% compared with the price at the beginning of the year. At the macro level, loose monetary policies in several major economies have boosted inflation expectations. The dollar continued to weaken. Gold and other safe haven asset prices rose for a time. The relationship behind the rise in bitcoin prices has been discussed. Institutional funds have also become a driving force. In addition to the bitcoin trust (GBTC) of grayscale investment, the financial information of MassMutual, micro strategy and square, a business analyst, has also added to the bitcoin data. Grayscale temporarily stops new investment according to the annual convention. In December, skybridge capital, MassMutual life and Guggenheim foundation increased their holdings. Diversified allocation of funds and the need to hedge systemic risk are considered to be the reasons for institutions to increase their holdings of virtual currency. The allocation of alternative investment by large institutions has also injected capital into bitcoin. In addition, PayPal, a payment company, opened cryptocurrency services from U.S. users in November. In December, Singapore Development Bank announced that it would launch DBS digital, a digital trading platform. In the same month, coinbase, the cryptocurrency exchange, announced its IPO. In addition, GAC Weilai certification microblog today announced that China’s first auto enterprise to accept digital currency payment for car purchase. The microblog has been deleted. Weilai has stated that there has never been a “bitcoin car purchase” scheme. GAC Weilai said that after confirmation by relevant departments, it will add new digital currency payment channels according to the actual situation. Song Jiaji’s team of Guosheng securities blockchain Research Institute analyzes the important reasons for the rise of bitcoin, including that bitcoin is regarded as a means of value storage by some people, and mentions that the “penetration” of gold is low. At the same time, he thinks that the lower interest rate may have several preconditions to boost the growth of the special currency, including the lower interest rate, which means that the yield of risk-free assets decreases and the attraction of risk assets increases; multiple defaults reduce the attractiveness of fixed income financial assets and increase the attraction of equity assets; and the premise that bitcoin should be regarded as equity like assets. Song Jiaji’s team also talked about the participation of “traditional” financial institutions, as well as the regulatory actions of the United States such as the approval of bitcoin and Ethereum futures, as well as the views expressed by several public figures including Tesla CEO musk. At the same time, if bitcoin ETF is not approved by the SEC, the listing of cryptocurrency exchanges such as coinbase will be blocked or listed Bitcoin prices will be under pressure when companies are hindered from buying bitcoin. Li Lianxuan said that there has always been speculation in the bitcoin market, but this round of bull market is different. The causes include the half effect of bitcoin, the admission of high net worth people and institutional users, and changes in the global macro situation. In May 2020, bitcoin experienced the third production reduction in history. About every four years, the reward of bitcoin blocks is halved. After the halving, the “miners” dig out each block containing 6.25 bitcoin awards, making it more difficult and costly to develop bitcoin. Since the previous halving has been accompanied by an upward trend, the trend of bitcoin price after the third halving has also attracted much attention. Li Lianxuan analyzed that the supply of bitcoin is rigid, and after the reduction of production, the circulation of bitcoin per unit time decreases continuously; in the long run, assuming that the growth rate of supply and demand of bitcoin are the same over time, the growth rate of supply slows down, resulting in the rise of bitcoin price; in the short term, due to the rigidity of bitcoin supply curve and the influence of changes in bitcoin demand, in the short term, bitcoin will increase It fluctuated violently. As for institutional funds, Li Lianxuan mentioned that the GBTC funds under gray scale are similar to ETF funds, but there is no redemption mechanism. There is a six-month lock-in period for the sales in the secondary market, and the primary market subscription is only for qualified investors. According to the third quarter report, 80% of the customers are institutional investors, which is considered as an indicator to observe the entry of institutional funds. The latest data shows that the total position of GBTC is close to 5 70000. Li Lianxuan, chief researcher of auco cloud chain, said that in the high inflation and low growth economic environment, in order to avoid the loss of nominal principal and the need to pursue higher returns, investors’ demand for cash hoarding has changed. He believes that monetary policy is a medium and long-term factor affecting bitcoin prices, which may have a negative impact on the price of bitcoin after the world’s major central banks turn to moderately tight monetary policy. Bitcoin has always been criticized. Warren Buffett has said that because such assets cannot create value, it is a bubble from this perspective. Because of the rise in bitcoin prices, the market value of Berkshire Hathaway (yse: BRK. A), founded by Warren Buffett, is also compared to the market value of bitcoin. Since 2020, the market value of bitcoin has surpassed JP Morgan Chase (NYSE: JPM) and MasterCard (NASDAQ: MA), and has recently surpassed visa (NYSE: V). As of December 31, Berkshire Hathaway had a market value of about $540 billion. When bitcoin costs more than about $29100, it means it’s comparable to Berkshire Hathaway’s current market value.

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