The encrypted digital currency, “bitcoin”, has fallen sharply in the near future, and has been down nearly 70% since the beginning of the year. Experts say this is caused by a variety of factors, and many of the so-called “block chain” projects have a serious bubble, and investment needs to be wary of risk.
As an encrypted digital currency, the price of bitcoin has skyrocketed in the past few years, reaching nearly $twenty thousand by the end of 2017, making many people feel unbelievable.
Since 2018, however, the price of bitcoin has begun to fall, especially in the recent “dive”. In November 20th, bitcoin fell more than 16% and fell below $4100, the lowest level since last October. The slump in bitcoin has also led to a sharp decline in other encrypted currencies. CoinMarketCap data shows that the current market value of the entire encrypted currency market has fallen to about $150 billion, a serious shrinkage compared to the $850 billion of the earlier year. The big fluctuations in the market have raised questions about whether the “encrypted currency can be a reliable means of preserving the value”.
People in the industry believe that the big drop in the bitcoin is the result of a variety of factors. At first, a large number of block chain projects have serious bubbles. In the case of unsound infrastructure of block chain infrastructure, practitioners continue to raise the market expectations to unrealistic heights, and eventually encounter realistic shocks, resulting in constant loss of market confidence; second, the bitcoin market is a capital market, and the volume is relatively small, and the market value of the global digital currency is also a large volume of the Internet listed giant. With the large amount of money holding users, the price volatility is easily caused by the large amount of money holding users, and the industry’s recent battle of calculation has also objectively shaken some people’s confidence, leading to some users panics and foot vote, further causing market volatility.
According to the relevant provisions of the people’s Bank of China, bitcoin is not issued by the monetary authorities do not have the law, such as monetary compensation of the mandatory property, not the true meaning of money. In nature, bitcoin is a particular kind of virtual commodity, which does not have the legal status equivalent to the currency, and should not and should not be used as currency in the market.
However, in recent years some people under the banner of “financial innovation” and “blockchain” banner, through the issuance of the so-called “virtual currency” “virtual assets” and “digital assets” to absorb funds, against the public interests. To this end, the seven departments, such as the central bank, have called to stop all kinds of currency issuance and financing, and remind the public to look at the block chain rationally and establish the correct monetary concept and investment concept.
People in the industry believe that, in the short term, when the transnational value transfer in the global market is transferred, bitcoin is still a relatively mature intermediary, and there is a certain market base, but with the tightening of regulatory policies in various countries, the regulatory arbitrage space of bitcoin is further reduced.
In addition, as the underlying technology of bitcoin, block chain still has a considerable and extensive application space, but its role still requires the maturity of a large number of matching technologies, such as faster network speed, cheaper storage equipment, higher demand for credit, and so on. The commercial application of the block chain also needs the construction of laws and regulations and the construction of the regulatory system.
Industry insiders say the recent decline in bitcoin means that many projects lack the support of real assets and are in a “Jungle” state and are proved to be inefficient by the market. After the market is clear, the era of “industrial block chain” is coming, the future digital assets and industry will be deeply bound, market supervision will be more perfect.