Bitcoin prices soared to $32000, a record high

The price of digital currency bitcoin has been growing rapidly recently, breaking through the $30000 mark on the evening of January 2, setting a record high. Oko cloud Chain Research Institute believes that this round of bitcoin bull market is the product of high inflation expectations. In the high inflation and low growth economic environment, in order to avoid the loss of nominal principal and pursue higher returns, the demand of investors to hoard cash has evolved into the demand for gold and bitcoin. As far as the current market situation is concerned, bitcoin is gradually changing from “alternative investment” to “digital gold”. William Wilhelm, an analyst at Oko cloud Chain Research Institute, said that there are two important time nodes in this round of bitcoin bull market: one is that bitcoin stands at the $10000 level in mid October 2020; the other is that bitcoin breaks through the $20000 mark in mid December 2020, setting a new record. Since the beginning of October last year, there are signs that institutions have begun to enter the market. For example, on October 8 last year, square, a mobile payment giant, announced that it had invested $50 million in bitcoin; on October 13, asset management company Stone Ridge holdings disclosed that it had purchased more than 10000 bitcoins. From $10000 to $20000, traditional institutional users are the main force of market growth. These traditional giants entered the cryptocurrency market and bought a lot of bitcoin, which brought unprecedented heat and optimistic expectation to the market, and drove the price of bitcoin up. However, in the second stage, when the bitcoin price broke through the $20000 mark, a large number of investors began to pour into the cryptocurrency market, which once caused some cryptocurrency exchanges to be stuck or down. This indicates that the main investment force of the market may change from institutional investors to small and medium-sized investors. On the other hand, the market excitement has been further amplified, people are more optimistic about the future of the special currency, and their risk tolerance is lower (market research shows that many people can borrow money and increase leverage to speculate in currency). In William’s view, the above two factors work together to promote the rapid rise of bitcoin prices. This is why it took two months for the bitcoin price to rise from $10000 to $20000, while it only took half a month to rise from $20000 to $30000: when small and medium-sized investors or users of the original currency circle collectively set foot on the first stage of the rise, they began to pour into the bitcoin market in the second stage, and the whole market excitement was driven up, so the price rose like this So fast. In view of the rapid rise in the price of bitcoin, auco cloud Chain Research Institute believes that for institutional investors, what they care about is profit, not “bitcoin belief” or “blockchain revolution”. After the vaccine is launched and the epidemic situation is gradually alleviated, the monetary policy will gradually change from loose to moderate tightening, and institutional investors are likely to sell bitcoin at that time. As the price of bitcoin becomes higher and higher, the market fluctuation will gradually enlarge. It is not recommended that investors increase excessive leverage. According to auco cloud Chain Research Institute, bitcoin prices often go up and down sharply and fluctuate greatly. As far as the current round of bitcoin bull market is concerned, from the perspective of bubble cycle, it should be in the transition from prosperity to excitement. Therefore, we should remind the majority of investors: there is no asset that can only rise but not fall in the world. We should invest rationally, control risks, and not actively increase leverage or loan to invest in bitcoin. (source: Xinhua Financial client)

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