JP Morgan unveils bitcoin long institutional funds and warns of major risks: retail funds may dry up!

Source: 21st century economic report original title: JP Morgan unveils bitcoin long institutional funds, warning of major risks: retail funds may dry up! While bitcoin stands at $50000 a piece, JPMorgan analysts point out in their latest report that unless the bitcoin craze cools and subsides moderately, its record price of $50000 will not last and cannot continue to rise strongly. Of course, investors will wait and see. According to J.P. Morgan analysts, the value of all bitcoin in circulation has surged to $900 billion from $200 billion in September 2020, and before the $700 billion jump, institutional investors invested only $11 billion into large trust and futures markets. Bitcoin has risen sevenfold since March 2020, and its market value has increased by $700 billion since September 2020. “Due to the relatively limited supply of a certain amount of new bitcoin based on” miners “, the holders of bitcoin charge a premium for the new bitcoin flowing into the market,” JP Morgan reminded. “The flow of funds from retail investors also enlarges the flow of institutional funds. However, with the re opening of the global economy, the retail capital flowing into bitcoin may be exhausted, which is what bitcoin faces A significant risk. ” Increasingly, there are signs that institutional investors are jumping into bitcoin and encryption. When Tesla bought bitcoin for $1.5bn in January, MasterCard said it would soon support “selected cryptocurrencies” in its payment network, allowing more stores to accept them as payments; and bny Mellon, the old custody bank, announced that it would hold, transfer and issue bitcoin and other cryptocurrencies on behalf of its asset management customers. As a result of this “bombing”, bitcoin surged to US $50584.85 on February 16, and then hit US $52621.84 in 17 days, setting a new record. As of 12:45, February 18, Beijing time, bitcoin 52119.22, up more than 75% this year. In its report, JPMorgan said bitcoin’s three-month real volatility, or real price volatility, was 87%, compared with 16% for gold, a traditional safe haven asset. The obvious high volatility of bitcoin relative to gold price has hindered the sharp rise of bitcoin, making it difficult to break through the current level of about 51000 US dollars. “But in the eyes of the bitcoin crowd, it means that bitcoin may pose a threat to gold status.” While bitcoin is increasingly described as “digital gold,” skeptics caution that it is too volatile to be widely represented in institutional portfolios. While there is speculation that more companies will join bitcoin and cryptocurrency under the leadership of a number of well-known institutions such as musk, JPMorgan Chase and wedbush securities have pointed out that the volatile price of bitcoin may prevent other companies from following Tesla’s actions. In January, UBS cautioned against the risk of bitcoin falling below zero. “The value of cryptocurrency is likely to return to zero due to competition from regulatory measures and better designed versions. Investors who hold cryptocurrency will lose their assets. ” In the ECB, Gabriel makhlouf, a member of the Governing Council, also warned bitcoin investors to be prepared to “lose all their money.”. In addition to the warning of the hot scene of the special currency, another collateral effect is that the attention and Discussion on “bitcoin and carbon emissions” are heating up. Many mining organizations have even published articles saying that environmentalists are determined not to buy bitcoin. In terms of the impact of bitcoin production on the environment, bitcoin mining is indeed not environmentally friendly. “Mining” bitcoin – the process of increasing the supply of bitcoin – requires a lot of electricity to run the relevant computers. Alex de Vries, a Dutch economist and PricewaterhouseCoopers analyst, calculates that the world consumes about 78 terawatt hours (TWH) of electricity for “mining” each year, equivalent to the national electricity consumption of Chile, a population of 20 million. Because of the need to run machines 24 hours a day, many “mining” companies have chosen to operate in places with cheap coal-fired electricity, which has exacerbated local pollution and led to a huge increase in carbon footprint. According to the data, the carbon intensity of the bitcoin network in 2019 is about 480-500g CO2 / kWh (the same as the carbon footprint generated by 780650 visa transactions), while the UK grid is about 250g CO2 / kWh. The amount of e-waste generated by bitcoin has reached 10.71 kilotons. Bitcoin mining electricity / chart source: Cambridge bitcoin electricity index is a less “friendly” view, and Mr. de Vries added that 98% of bitcoin mining machines may never be able to produce a block. “At present, there are about 4 million active mining machines in the world, which can produce nearly 75000 blocks in a year and a half, which means that less than 2% of bitcoin miners can produce a block to verify bitcoin transactions, while the remaining 98% cannot produce complete blocks.” (author: Hu Tianjiao, editor: Li Yilin)

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