“Whale” behind bitcoin boom

“I will not sell bitcoin, I will hold it for 100 years.” Michael Saylor, founder and CEO of MicroStrategy, said in a media interview in October 2020. At that time, bitcoin was still hovering around $13000. About two months later, bitcoin hit the $20000 mark for the first time on December 16, and then ran all the way. According to the data of non small websites, as of 21:40 Beijing time on January 3, 2021, bitcoin was at US $34158.38 (the latest bitcoin market, please pay attention to AI express), with the highest intraday price of $34759.16, with a fluctuation of 14.23% in 24 hours. MicroStrategy is currently the largest public company with 70470 bitcoin holdings. However, it is only a microcosm of the recent expansion of listed companies and traditional financial institutions into the bitcoin market. According to the latest data of bitcoin holdings Statistics Platform bitcoin Treasury, at present, more than 20 institutional investors have entered the bitcoin market, holding a total of 1151618 bitcoins, and the current total value is about 40 billion US dollars (calculated by 34759.16 US dollars / piece, the same below). Michael Saylor told the daily economic news that institutional investors are investing bitcoin as a safe haven asset, which is a chain reaction brought about by the expansionary monetary policy of global central banks. However, the team of JPMorgan strategist Nikolaos pangirtzoglou pointed out in a report that it is difficult to avoid “overbooking” in bitcoin. If inflows to the world’s most traded cryptocurrency fund fall sharply, the likelihood of a bitcoin pullback will increase. MicroStrategy is the first listed company in the world to publicly announce bitcoin as an allocation asset. The company’s big bets against the special currency began in the summer of 2020. On August 11, 2020, MicroStrategy purchased 21454 bitcoins for the first time for us $250 million and said it would use bitcoin as its main reserve asset. Subsequently, the company bought 49016 bitcoins in September and December. MicroStrategy has invested more than $1.1 billion in bitcoin in 2020, and currently holds 70470 bitcoin, making it the largest “bitcoin whale” among listed companies. “Investing in bitcoin is a well thought out strategy for companies.” Michael Saylor, founder and CEO of MicroStrategy, told reporters. In his view, bitcoin is the best collateral in the world that gold or any other commodity can’t match. Saylor believes that bitcoin has similar monetary utility to gold, but better than gold, and there is no need to worry about devaluation. In an interview in mid October 2020, Saylor even said he would hold bitcoin for 100 years and had no plans to sell it. The gray bitcoin trust, the largest trust product of crypto asset management company and the world’s largest cryptocurrency trading fund, has been actively buying bitcoin. Currently, the fund has 572644 bitcoin positions, with a total value of more than $19.9 billion. According to SEC documents, nearly 20 institutions have invested in the Fund recently, including well-known mutual funds such as ark investment, which manages $4.5 billion, horizon kinetic, which manages $5.3 billion, and newer investment companies such as Rothschild Investment Corp. Guggenheim partners, the world’s largest fixed income asset manager, previously announced that it would retain the right of its $5.3 billion macro Opportunities Fund to invest in the gray bitcoin trust. In a recent filing with the SEC, the company said it might invest up to 10% of its net assets (about $530 million) into the “gray bitcoin trust” through the macro Opportunity Fund. There are also investment companies eager to try. Wall Street hedge fund tycoon Anthony scaramucci has revealed that his hedge fund skybridge capital has set up a new bitcoin fund and injected $25m into the fund, which is planned to open to investors on January 4, 2021. According to the latest data of bitcoin holdings Statistics Platform bitcoin Treasury, the total number of bitcoin positions held by institutional investors is 1151618, with a total value of about $40 billion. The admission of a large number of institutional players ignited a fire for the bitcoin market. As of 19:31 Beijing time on January 3, 2021, the highest price of bitcoin was $34759.16, according to non small website data. Since the birth of bitcoin in 2009, its first price was produced in 2010. A programmer exchanged 10000 bitcoins for two pieces of pizza, with a fair value of about $0.0025. If calculated at the price of $34759.16, the price increase since the birth of bitcoin has exceeded 13.9 million times. Referring to the recent rally, Kiran Raj, chief technology analyst at global data, a well-known data analysis and consulting company, said: “the sharp rise in bitcoin prices in 2017 is the speculation of retail investors, while the sharp rise in bitcoin prices since 2020 is due to the shift of investment focus from institutional investors, listed companies, large banks and payment companies to digital assets and cryptocurrencies. ”The logic of market investment has changed. Behind the change of “institutional bull”, is the change of investors’ attitude towards the special currency under the current market situation. With the continuous increase of central banks’ loose monetary policies, inflation expectations continue to rise, and the risk of currency devaluation is further intensified. In this context, digital assets as a new type of assets, began to attract the attention of investment institutions. Some large investment institutions have begun to be interested in the special currency, believing that it can become a new safe haven asset. Michael Saylor told the daily economic news: “since March 2020, central banks around the world have expanded the supply of M1 and M2 quite rapidly in response to the new coronal pneumonia pandemic, which has led to an annual asset inflation rate of more than 15%. And we are sure that asset inflation will continue over the next five years. This means that cash itself is no longer a good means of wealth reserves, and stocks, bonds and real estate are also valued according to the basic cash flow, and the risk is very high. ” As a result, investors are in urgent need of new investment tools that can hedge against inflation and get more returns at the same time. In May 2020, Paul Tudor Jones, a well-known Wall Street investor and legendary hedge fund manager, said that bitcoin would be a very viable investment tool in the face of macroeconomic inflation. Among the large asset classes such as stocks, commodities and bonds, bitcoin will be “the fastest runner in the race.”. In an interview with CNBC, he even said investing in bitcoin was like investing in early apple or Google. Currently, bitcoin accounts for 1-2% of his portfolio, and his fund BVI global fund manages $22 billion in assets. In fact, Jones was involved in bitcoin as early as 2017. According to Jones, his motivation to buy bitcoin this time is different from that of the last time, which he has evaluated as a value store. He believes that bitcoin will play an increasingly important role in the unprecedented economic environment of monetary expansion and inflation. In addition to hedging risks, the increase in bitcoin scenarios is also affecting the value of the digital currency. In 2020, the use of Internet finance companies in comparison with special currency and cryptocurrency will increase dramatically. In October 2020, PayPal, a mainstream payment platform, announced that it would allow users to hold or trade bitcoin using paypal, and 26 million merchants on its platform would be able to choose bitcoin and other digital currencies as one of the payment methods. Recently, cash app, a transfer tool owned by square, a payment giant, said that consumers can get bitcoin rebate every time they make a payment. Previously, cash app only provided us dollar rebate. Pierce Crosby, general manager of tradingview, a financial data company, said in an interview: “the focus in 2021 will be on the continuous improvement of continuity between the traditional market and the encryption market. A good example is the bitcoin or PayPal offered by square to pay through cryptocurrency. In fact, there are many such cases of cryptocurrency, and we expect these cases to increase rapidly in the coming year. ” The sustainability of the rise is still controversial. Does it mean that the encryption market will continue to prosper when digital assets such as bitcoin gradually enter the vision of mainstream financial institutions? In Michael Saylor’s view, bitcoin prices will continue to rise, because digital assets such as bitcoin will be a new channel to digest global capital in the future, and a large amount of capital flowing into the encryption market will be a long-term global asset reallocation. “Bitcoin is a high-tech digital form of gold, and its investors usually do not use leverage for a very long period of time. Institutional investors invest bitcoin as a safe haven. It’s not a market rebound or a bubble. It’s a chain reaction brought about by the expansionary monetary policy of global central banks. ” He told the daily economic news. Ryan selkis, co-founder and CEO of messari, a well-known research institution in the encryption industry, also mentioned in his “2021 encryption investment theory report” released last month that the encryption market will usher in a big bull market in 2021. He predicts that bitcoin will reach at least $100000 by the end of 2021. Tom Fitzpatrick, an analyst at Citibank, predicts that bitcoin will soar to $318000 by December 2021. Raoul pal, a former hedge fund manager at Goldman Sachs, who founded real vision, said money from institutions would form “a huge wall of money” to help bitcoin prices rise rapidly. He predicted that the price of bitcoin could reach $1 million in five years. In addition to a large number of voices, there are also market analysts that support the current high bitcoin price is just an unsustainable speculative enthusiasm. In a report, the team of JPMorgan strategist Nikolaos pangirtzoglou pointed out in a report that it is difficult to avoid “overbooking” of bitcoin. If inflows to the world’s most traded cryptocurrency fund fall sharply, the likelihood of a bitcoin pullback will increase. On December 21, 2020, grayscale announced that its six cryptocurrency trust funds would suspend new investment. Industry insiders believe that although this is a normal temporary suspension, it may slow down the entry of institutional funds into the market and aggravate short-term risks. In addition, it is worth noting that in addition to the capital allocation factors of large institutions, the encryption market will also be affected by many other factors in the future. According to Guggenheim, bitcoin is highly volatile, and changes in regulations, user preferences, or a crisis of confidence in the bitcoin network can all lead to its devaluation. The agency noted that future regulatory measures or policies may limit investment institutions’ indirect investment in cryptocurrencies and their ability to exchange cryptocurrencies or make payments using cryptocurrencies. Daily economic news

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