The craziness and risk behind bitcoin’s 34000 dollars

At the beginning of 2021, bitcoin has gained a lot of attention. As of 17:05 on January 3, 2021, bitcoin quoted us $34508. The price of bitcoin has increased by 15.52% within 24 hours, 24.4% on the 7th, 94.19% in the month and 633.43% in the year. Compared with the initial price, the price of bitcoin has increased by 13.8 million times. However, in the soaring market, craziness and risk go hand in hand. In addition to the howl of stock burst after misjudgment, there are also growing illegal behaviors and traps. Ordinary consumers need to be vigilant at all times, and the high income of the currency circle also means high risk. The price of bitcoin has increased 13.8 million times in ten years, and the recent crazy rise of bitcoin is amazing. It takes only half a month to break through the $20000 mark on the evening of December 16, 2020, with a one-day increase of more than 10%, to breaking through the $30000 mark on the evening of January 2, 2021. Bitcoin continued to rise on January 3, reaching a record high of $34538 at 3:49, according to the global currency price website coinmarketcap. The reporter of Beijing business daily noted that under the stimulation of the new high, the bitcoin trading market is still very active, and the price is constantly fluctuating. The price can fluctuate by more than 1000 US dollars in only one second. As of 17:05 on January 3, bitcoin’s latest price was $34508. It rose 15.52% within 24 hours and 24.4% on the 7th. Once again, the coin circle has witnessed “history”. Based on the latest price of $34508, bitcoin has increased by 633.43% and 94.19% respectively from a low of $4705 on March 13, 2020 and a low of $17770 on December 11, 2020. If we extend the time line to the $0.0025 price corresponding to the purchase of bitcoin in 2010, the price of bitcoin has increased by 13.8 million times since its birth. From the perspective of the reasons for the rise, many people in the industry believe that the bitcoin price surge includes many factors. On the one hand, it is institutional promotion. In fact, since the beginning of October, a number of large institutions, including mobile payment giant square, asset management company StoneRidge holdings and cross-border payment platform PayPal, began to enter. These traditional giants entered the virtual money market and bought or announced to buy a large number of bitcoin, which led to the rise of bitcoin price. On the other hand, the influx of retail investors. It is worth noting that since the bitcoin price broke the $20000 mark in December, a large number of retail speculators began to pour into the currency circle, which once caused some currency circle exchanges to be stuck or shut down. The market excitement was further amplified, and many people even borrowed money and increased leverage to speculate in currency. Therefore, a number of factors work together to push the price of bitcoin up again. In addition to the continuous entry of institutional investors and the crazy follow-up of currency people, song Jiaji, a researcher at Guosheng securities blockchain, told the Beijing Business Daily that the strong trend of bitcoin may also be related to the active “water release” of central banks since the outbreak of the epidemic. The decline of risk-free interest rates has raised the prices of various financial assets, while bitcoin has gradually been taken in by various institutions and gradually improved Enter the list of financial assets concerned by the institution. With the explosion of 50000 yuan, bitcoin has reached a new high, and behind the carnival of countless coin holders, speculators’ howling is indispensable. In the game market of currency circle, many currency people increase leverage to speculate in currency to enlarge the risk. Once the anticipation is wrong, it will lead to double heavy losses. In only 24 hours, tens of thousands of people had been “harvested”. According to the contract emperor’s data, as of 10:37 on January 3, 2021, nearly 48095 coin holders have been sold in the last 24 hours, with a total amount of US $844 million. As of 17:05 on January 3, the number of currency holders who had burst positions in the past 24 hours had reached 57648, with the amount of $1.005 billion. This burst, the loss of the crowd is mainly short on the market. The contract transaction, as called by the currency circle, is a forward transaction mode of trading products. Compared with spot trading, contract trading has two major characteristics: one is that it can make both long and short, which can make two-way profits; the other is that it can increase leverage to make it small and broad. Before that, some currency circle exchanges generally had contract trading leverage multiples of 5, 10 and 20 times. However, in order to meet the “demand” of players, many exchanges have launched futures contracts and perpetual contracts, with leverage as high as dozens, hundreds and even thousands of times. “It is the long-term investment users who have greatly increased the confidence in the market, while the ones who have been exposed are those speculative users who bet on bitcoin and other virtual currencies that can not break through in the whole number and open multiple contracts to bet on falling short positions.” Liu Feng, director of the blockchain technology and Application Research Center of the artificial intelligence and Change Management Research Institute of Shanghai University of international business and economics, told Beijing Business Daily that there are great fluctuations when breaking through the digital barrier and creating a new high, and the probability of speculators’ positions exploding has also increased sharply. It is no surprise that the $1.005 billion warehouse burst this time. Song Jiaji’s team also said that in the process of bitcoin’s gradual “institutionalization”, retail investors will have to pay a higher cost to chase higher prices, and some retail investors may increase leverage to further amplify the risk. It is important to note that although bitcoin has again reached a high point, according to its previous performance, it will generally fall within a certain period of time. Song Jiaji’s team further pointed out that we should be vigilant against bitcoin price fluctuations and be prepared for a sharp drop. Behind the rise of bitcoin, there is not only the risk of a large number of contract speculators exploding, but also a lot of illegal activities can take advantage of the sharp increase of the currency market. “Such as disguised money laundering, pyramid selling fraud and other illegal acts, worthy of attention.” Liu Feng pointed out. Beijing business daily learned from many sources that due to its anonymity, untraceable and transnational transaction, it is not uncommon for criminals to launder money through bitcoin. It is understood that this process can be roughly divided into two steps: first, convert the legal currency of the remitter’s location into virtual currency, which can be purchased directly at the exchange; second, the virtual currency will be converted into the legal currency of the payee’s location at the receiving end, which can also be directly traded with the seller through the virtual currency exchange or directly with the seller. There are also some blockchain technology speculators and even “pseudo blockchain” technology, using the speculation psychology of the public to speculate in virtual currency. At present, with the new high price of bitcoin, the market transaction is active, and various kinds of counterfeit currency and pyramid selling currency begin to frequent activities. Through some so-called virtual currency investment training courses, in the name of training, people are invited to join the group to share investment suggestions, but actually it is “cutting leeks”. In addition to how to prevent market risks from the risk of speculation, recently, many non local offices have emphasized that some illegal elements, under the banner of “financial innovation” and “blockchain”, absorb funds by issuing so-called “virtual currency”, “digital assets” and “digital circular certificate”, and infringe upon the legitimate rights and interests of the public. For example, the office of the leading group for prevention and disposal of illegal fund-raising in Xiling District, Yichang City, stressed that the illegal absorption of funds in the name of “virtual currency” and “blockchain” is not really based on blockchain technology, but the practice of illegal fund-raising, pyramid selling and fraud by hyping the concept of blockchain. The public should be highly vigilant against the risks of token issuance financing and transactions. “At present, with the rising market price of currency circle and the frequent encouragement of various investment groups, counterfeit currency and pyramid selling currency, many small white investors without professional knowledge reserve are prone to property losses and even legal risks. To prevent such risks, on the one hand, the regulatory authorities should strengthen the supervision of the currency circle market, protect the property safety of legitimate investors, and continue to crack down on illegal activities. On the other hand, investors should learn relevant knowledge, have a certain sense of legal protection, and strengthen their ability to resist risks. ” Liu Feng thinks. It should be noted that virtual currency transaction is not protected by Chinese law at present. Since the seven departments stopped the issuance and financing of various virtual currencies in 2017, many virtual currency trading platforms have mostly turned to overseas markets. However, the regulators in many places are still fighting against the domestic market transactions. Just in August 2020, the Shanghai headquarters of the central bank has made it clear in the follow-up key work deployment that it will rely on the local coordination mechanism of the financial Commission Office (Shanghai) to coordinate regional financial risk research and judgment, continue to do a good job in ICO and virtual currency transactions, and vigorously crack down on illegal behaviors such as cross-border gambling, e-mail network fraud, illegal operation of Payment institutions and unlicensed payment business. A number of analysts further suggested that there is no asset that can only rise but not fall in the world. It is necessary to invest rationally, control risks, and not actively increase leverage or loan to invest in bitcoin. And domestic ordinary consumers need to be vigilant and cautious to enter. Beijing Business Daily reporter Yue Pinyu and Liu Sihong

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