Bitcoin’s crash will come, but did not expect to come so fast, so completely.
Digital currency market has experienced another round of bloodbath, bitcoin, Wright currency have Ethernet square, down to about 15%, the market value of the top 500 in the digital encryption currency, many coins fell more than 20%.
Then, the market once again collapse drop, bitcoin two decline reached 8.67% and 13.29%, to close at $4860 / month near record low since this year; the etheric Fang fell more than 30%, the distance between the same close below $100, the lowest this year.
In fact, bitcoin has been cut to two times, the highest point in 2017 from $20 thousand, bitcoin fell below $5000, equivalent to $20 thousand, cut in half again. An asset if after a two cut, you can predict the future trend of it, if the currency from the perspective of the crash, bitcoin turn over time may be very far away.
Digital currency since birth coincided with the Wall Street financial crisis, when the crisis was the occasion of the world, the major economies of the central bank in order to save the economy, basically starting the printing press. The way to save the economy, it is in fact the total supply is as a case, by printing money to stimulate demand, which is equivalent to the moribund economy blood transfusion, to stimulate the economy energy.
However, according to the theory of endogenous money, economic transaction needs to generate money, money mark prices suggest the scarcity of some goods or services, and the allocation of resources to the most efficient place.
If the money is exogenous, such as economy of the demand by the central bank, quantitative easing to stimulate demand, holding the debt, the money supply is greater than demand for money, it will form the basis of inflation. In fact, the central bank created money is far greater than the historical data, will lead to hyperinflation.
But recently this year, the reality is that in addition to the individual countries of the real estate market prices, in the ordinary consumer prices and commodity prices rose significantly, has not formed. But there is one rose very crazy, that is a digital currency. Bitcoin was born in 11 months 2008 years 1, 2009 years 1300 bitcoin was exchanged for $1. Until February 9, 2011 1, bitcoin price only $1 for the first time. 2017 1, bitcoin prices have soared to $20000.
In 2018, bitcoin finally ushered in the crash of 1929. For the bitcoin crash, it is classified as bitcoin cash (BCH) hard bifurcation, bifurcation is called hard when a digital currency community consensus for the original technology of digital currency differences, in the original chain points out a new chain, and thus produce a new currency. The hard fork in the early morning of November 16th finally landed, at present the two sides are in a large-scale “war”, in the short term is difficult without a winner, which affected the traders and increasing confidence.
This interpretation only saw the phenomenon did not see the nature of bitcoin although with future currency should have some characteristics, these characteristics make it significantly ahead of the sovereign credit currency: for example, to the center of the whole network by the user, not the central bank; the private key of bitcoin, but no one can own outside users access; transactions convenient, without any control mechanism, will not leave any transaction records and so on.
But it does not have the property that is the most important currency, credit, modern sovereign credit currency, by the government to force as credit support. Before the modern sovereign credit currency credit has not been to a digital currency, bitcoin is similar to that of a commodity, the commodity value only in the people who believe in it, or that future prices will people gain by speculation, it must have a lot of cash support these transactions, and maintain prices. If these funds will shrink and collapse.
The price of bitcoin and quantitative easing off the global central bank just overlap, and quantitative easing when the central bank to stop, is at the end of the day bitcoin are coming on.
The Fed has conducted 8 interest rates, other emerging economies started to raise interest rates and joint process, reduced form, the European Central Bank and the Bank of Japan also began to withdraw from the quantitative easing policy.
This year, M1 and M2 can be described as credit currency Chinese cliff banking system fell 10 at the end of this year, M2 grew 8%, an increase of 2.7% and M1; 10 at the end of 2013, M2 grew 14.3%, M1 grew 8.9%, over the past five years, the growth rate of currency in different heaven and earth. The central bank is currently Chinese despite the relatively loose monetary policy, but the ability to create credit economy is declining, the currency of the natural growth rate began to decline.
When these extra money began to disappear, support bitcoin prices have disappeared, bitcoin has become a kite.