Xinhua news agency, Shanghai, November 25 Xinhua (reporter Gao Shaohua) the encrypted digital currency bitcoin recently fell, from the beginning of the year has continued to decline in nearly 70%. Experts said that this is caused by a variety of factors, many of the so-called “blockchain” project has a serious bubble, the need to guard against the risk of investment.
As a kind of encryption digital currency, bitcoin prices soared in the past few years, by the end of 2017 had reached a peak of nearly $twenty thousand, so many people feel unbelievable.
However, since 2018, bitcoin prices began to fall, especially in the recently staged “diving”, on November 20th, bitcoin fell more than 16%, fell below $4100, the lowest level since October last year. Bitcoin crash, also led to other encryption currency fell sharply. CoinMarketCap data show that the current market value of encryption currency has dropped by about 150 billion dollars, at the beginning of this year and $850 billion when compared to the scale of serious shrink. Market volatility, caused people to “encrypted currency can be reliable hedge”.
Insiders believe that the bitcoin crash is the result of many factors together. First of all, the large block chain project there is a serious bubble, in block chain infrastructure are not perfect, the market is expected to continue to push practitioners highly unrealistic, eventually encounter real combat, resulting in the continual loss of market confidence; second, bitcoin market is due to the capital market, and the volume is relatively small, but also the global digital currency market a listed Internet giant volume, with large cash users zapan, also easy to cause sharp fluctuations in currency prices; third, is the industry the recent war, has shaken the confidence of the people in the objective, makes some people panic and vote with their feet, due to 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. From the nature point of view, bitcoin is a specific virtual goods, does not have legal status and monetary equivalent, can not and should not be used as currency in circulation 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 central bank and other seven departments have stopped posting all kinds of tokens issued to finance, and to remind the public rational view of block chain, establish a correct concept of money and investment philosophy.
The industry believes that in the short term, in the global market value of transnational transfer, bitcoin is still intermediary mature, there is a certain market foundation, but with the national regulatory policy tightening, bitcoin regulatory arbitrage space further narrowing.
In addition, as the underlying technology bitcoin blockchain, still have a large and wide application space, but its role is still need many supporting technologies, such as faster speed and cheaper storage equipment, higher credit demand etc.. The commercial application of the blockchain, supporting the construction of laws and regulations also require the construction and supervision system and.
Insiders said that the recent bitcoin decline means that many projects lack of real assets, in “the jungle”, the market was proven to be inefficient. The market clearing, “industrial chain block” era is coming, the future of digital assets and industry depth bound, market regulation will be more perfect.
Editor: Han Jiahui