Bitcoin is a high-risk asset, not a safe-haven asset

  Young people use leverage to speculate coins, dangerous

  "210,000 (RMB) bitcoins, witness history!" On the evening of January 2, Beijing time, after 1995, Xu Zhou was "shocked" by the bitcoin market.

  The first working day of 2021 has not yet arrived, and the price of Bitcoin once again reached a record high, which was close to 31,000 US dollars.

If calculated on the basis of total market value, it is higher than Berkshire, a subsidiary of Buffett, and Moutai, the king of A-share market value.

  Xu Zhou has been paying attention to Bitcoin for several years, and he has personally "speculated the currency" several times.

Like the bull market he has experienced before, he is eager to know, what is driving the price of Bitcoin?

Does the new round of skyrocketing also contain Bitcoin price bubbles?

Global economic slowdown, financial institutions overweight Bitcoin

  Since December last year, the price of Bitcoin has continued its bullish upward trend.

Since it stood at US$20,000 on December 16, it has started a hurricane, rising from US$21,000 to US$27,000 in just 12 days.

In the longer term, the price of Bitcoin has increased by more than 10 million times in the past 10 years.

  A research report recently released by Zhongtai Securities believes that the nature of Maotai, housing prices and Bitcoin's rise is the same.

When the currency is over-issued, buying gold, Maotai, core stocks, and core real estate is a process of rediscovering scarcity.

The scarcity of Bitcoin is its main feature that distinguishes it from banknotes and tulips. The latter two can be printed and produced indefinitely.

  More than ten years after the birth of Bitcoin, the "mining" capability has gradually stabilized.

Due to technical limitations, the total number of bitcoins is limited to about 21 million.

Under the influence of the macroeconomic environment, many institutional investors have entered the market, and the currency price has risen in the face of huge market demand.

  William, the chief researcher of OKEx Research Institute, believes that Bitcoin's recent rapid rise does have speculation and hype, but the direct cause is the entry of high net worth investors and institutional investors.

  Since the second half of 2020, financial institutions such as the American insurance giant MassMutual Life Insurance Company have bought bitcoin. Online payment giant PayPal and Singapore's largest commercial bank DBS Bank have also announced the launch of cryptocurrency payment services.

Data from Bitcoin Treasuries, a platform for statistics on Bitcoin holdings, shows that currently more than $6.9 billion worth of Bitcoin is held by listed companies.

  In fact, in recent years, Bitcoin, as a new asset allocation method, has gradually received attention on Wall Street. Many financial institutions have submitted Bitcoin ETFs (listed and traded on exchanges, funds) to the US Securities and Exchange Commission (SEC). An open-end fund with a variable share) application, but the US financial regulators are opposed to the issuance of Bitcoin ETF due to concerns about market fluctuations, industry manipulation, and scarcity of liquidity.

  Hong Shuning, chief strategy officer of Zhejiang Yongqi Blockchain Technology Co., Ltd., said that the "Grayscale Bitcoin Trust Fund" has been actively buying bitcoins in the second half of 2019. Investors can use the trust fund to purchase bitcoins with US dollars through legal channels. , For trust management, but funds in this channel will flow unidirectionally to Bitcoin.

By 2020, due to the impact of the new crown pneumonia epidemic, the Fed will "release water". Many investors are worried about inflation and will invest more funds in Bitcoin through the "Gray Bitcoin Trust Fund".

  William analyzed that the deep-seated reason behind the massive purchase of Bitcoin by financial institutions is the change in the global macroeconomic situation this year.

On the one hand, due to the impact of the epidemic, the global economic recovery will slow down in 2020; on the other hand, represented by the U.S. central bank, the central banks of some countries have introduced extremely loose monetary policies, pushing up inflation expectations in the financial market.

In an economic environment of high inflation and low growth, in order to avoid the loss of nominal principal and the need to pursue higher returns, investors' demand for hoarding cash has naturally evolved into demand for gold and Bitcoin.

Do not promote young people to increase leverage to "speculate coins"

  The news that the price of Bitcoin has skyrocketed again is always the first to circulate in the circle of speculation.

Recently, many people have come to ask Hu Hao (pseudonym): "I heard that Bitcoin has risen to more than one hundred thousand yuan. How much did you earn?" To these kinds of questions, this young man born in 1992 He laughed: "What does it have to do with us?"

  Hu Hao has been exposed to virtual currencies such as Bitcoin and Ethereum since 2016. At the beginning, he bought mining machines to "mining" with a few classmates.

When the market is good, "a mining machine worth more than 10,000 yuan will pay back in one month."

That year, many people in small counties in the northeast of the country built wires privately to "steal electricity and mine.

  Hu Hao noticed that the main crowd of "coin speculation" at that time was young people in the county town. They generally did not have a stable job, but they learned about the wealth creation myth of Bitcoin and other virtual currencies through the Internet.

"There are more than ten of the elementary school classmates who are playing coins. Most of them have never gone to college or worked in a big city."

  Relying on "mining", Hu Hao made his first sum of money and bought 0.5 Bitcoin.

At that time, various "altcoins" rushed to appear, and ICO (Initial Coin Offering) once again created a wave of wealth creation myths.

Hu Hao also joined the ranks of "fried altcoins" and replaced all the bitcoins on his hands with other small currencies.

However, the ICO New Deal in September 2016 made the vast majority of virtual currencies "exposed", and Hu Hao's currency value shrank from 100,000 yuan to 20,000 to 30,000 yuan.

  After playing virtual currency for nearly 5 years, Hu Hao lost more than 50,000 yuan.

Like many young people who "speculate coins", he often laughs at himself as "leeks."

Recently, the price of Bitcoin has reached a new high, and a friend came to him to ask him for help. Hu Hao always tells his own story, and he will also persuade him: to make a plan to lose money, think It is impossible to make a fortune and change destiny by it.

  But the experience of the predecessors often cannot stop the excitement and enthusiasm of future generations.

  During the epidemic, Xu Zhou bought a portion of Bitcoin at a unit price of nearly $4,000, and pulled out when the price doubled.

Recently, the price of Bitcoin has risen to US$23,000, and many novices have come to him for advice, hoping to "make more money" with him.

Although "regretted that my thigh was swollen", Xu Zhou refused the invitation of these novice friends.

His reason is: "Everyone can only make money within their own knowledge. I can't understand the current market."

  At the core of virtual currency trading, William noticed that this round of bitcoin bull market was initially dominated by institutions, but there is currently a trend towards small and medium investors.

One of the evidence is that when the price of Bitcoin exceeded the $20,000 mark, a large number of investors began to pour into the cryptocurrency market, which once caused some cryptocurrency exchanges to experience stalls or downtime, and some investors even used credit cards or Loans to "speculate coins."

In market research, they also found that some investors have increased leverage by more than ten times or even dozens of times to "speculate coins."

"This is not something worth promoting."

  In fact, the Bitcoin market is still known for its volatility.

According to calculations based on the past trend chart of Bitcoin prices, there have been 10 cases of cumulative declines of 20% or more since 2016.

There were 7 cases where there was a 30% drop; 4 times when there was a drop of more than 48%.

Hong Shuning also reminded that the accelerated rise of bitcoin prices will inevitably form a larger bubble, especially risks.

  "The market excitement is further amplified, pushing the price of Bitcoin to rise rapidly." William reminded that young ordinary investors need to remain rational and correctly recognize that Bitcoin is a high-risk asset, not a safe-haven asset, and the price fluctuates greatly. Therefore, do not easily increase leverage, otherwise it will further amplify investment risks.

  China Youth Daily and China Youth Daily reporter Wang Lin Source: China Youth Daily