Youth Economic Theory

Entering the currency circle after 95 "pays tuition" for huge profits

  The "routine" of the currency circle is far more than simply "buying coins" by fooling retail investors through forums.

There are also full-time "staff" in the "coin circle" who fool retail investors to "mining".


  The myth of huge profits in the currency circle has attracted waves of post-95s to enter the game.

They firmly believe that the cost of tens of thousands of yuan can be increased by at least 10 times. Some people insist on watching the market for 1-2 hours a day under the temptation of huge profits, but more people pay a lot of tuition fees.

  Recently, the Beijing Municipal Financial Supervision and Administration Bureau and the People’s Bank of China’s Business Management Department jointly issued a risk warning on preventing virtual currency trading activities.

"Risk Warning" solemnly warns relevant institutions within the jurisdiction not to provide business premises, commercial display, marketing, and payment diversion services for virtual currency-related business activities, and financial institutions and payment institutions within the jurisdiction must not directly or indirectly provide virtual currency to customers Related Services.

  Affected by the news, the price of Bitcoin took a sharp turn, from the highest point of 65,000 US dollars to about 33,000 US dollars, until July 19, its price was still hovering at 31,000 US dollars.

The reporter noticed that in the previous June, the central bank interviewed some banks and payment institutions on the issue of providing related services for virtual currency transactions by banks and payment institutions, demonstrating the determination to prevent individual risks from being transmitted to the social field.

It's not just Bitcoin that has fallen sharply, all types of virtual currencies have ushered in a drop of 10%-40%.

  However, there are still post-95 players who saw the virtual currency plummet and "spoken" on the public online platform, "If they fell below $10,000 (USD), they would sell their houses."

University student speculators in order to "counterattack"

  Since entering the currency circle in early 2018, Xia Jie, a college student in Xi'an, has been in contact with the currency circle for nearly three years.

His personal Weibo and circle of friends have been flooded with virtual currency-related content for nearly a year.

  On April 6, he wrote in the circle of friends: “As a college student, his main job is to make money, holding tens of thousands of Ont, and waiting for the news to report that a college student in Xi’an has made millions. Don’t doubt, then It's me." Ont's full name is Ontology coin, which is a public chain token.

Xia Jie firmly believed that the Ont coin in his hand could be at least 10 times higher.

He claimed that before the overall decline in virtual currency prices, his "peak" had been directly at one million yuan.

  He even thinks that "coin speculation is easier than stock speculation."

"The stock market earns 3 times and 5 times a year too few people. But in the currency circle, the ups and downs are shared by everyone, and the market opportunities are unlimited. Real estate speculation is no longer suitable for young ordinary people."

  In this regard, Hu Jie, a professor of practice at the Shanghai Advanced Institute of Finance and a member of the Blockchain Committee of the China Computer Federation (CCF), opposes it.

He told reporters that the "risk" in the financial field is generally measured by the fluctuation range of the price of the subject matter.

"From the perspective of the fluctuation range, the risk of virtual currency is much higher than that of stocks." He cited the price of Bitcoin as an example. The currency has risen from around US$3,000 before the epidemic to US$60,000 at the beginning of this year, and has recently fallen to US$60,000. About 31,000 US dollars, "compared to this, it is rare for stocks to change so much in a short period of time."

High-intensity scrutiny every day, "routine" by people with ulterior motives

  Different from Xia Jie, more post-95s have obviously felt that there are many "routines" after contacting the currency circle.

  Wang Shi from Chongqing "followed the trend" and entered the currency circle in March this year.

He invested 1,000 yuan with his friend on a certain cryptocurrency app, and made more than 700 yuan in two days, and then continued to increase his position.

Wang Shi told reporters that he is more inclined to play short-term: place an expected price order at a low midnight, and after getting up during the day, he will consider whether to sell or buy according to the data.

This requires him to watch the disk intensively for 1-2 hours a day.

In more than a month, Wang Shi finally made a profit of several thousand yuan.

  Chen Li, who is taking the postgraduate entrance examination, fought coins with Wang Shi.

But he didn't have time to keep an eye on the market every day. After buying 4300 yuan of "Ethereum" coins, he lost 2400 yuan directly in less than half a month.

  Both Wang Shi and Chen Li finally decided not to "speculate coins."

Wang Shi told reporters that he follows various players in the coin speculation community forums. There are often various so-called "coin circles" showing their daily "achievements". Many people can earn 100,000 yuan in one night, but more "Small players" lost their money. "Their'various attitudes' in the group are quite ironic." Based on his observations of the "coin circle", he believes that "at least 90% of the people have lost."

  Yang Jing, an undergraduate student majoring in finance, is also quietly observing the currency circle.

She found that the currency circle is more like a "golden battlefield" full of scheming and calculations, "it is a game between people. Those who claim to make big money, may not make money by speculating on coins, but You make money by routine."

  On the evening of May 18 this year, the three major departments of China Internet Finance Association, China Banking Association, and China Payment and Clearing Association jointly issued the "Announcement on Preventing the Risk of Hype in Virtual Currency Transactions."

On the same day, the Inner Mongolia Development and Reform Commission issued the "Announcement on the Establishment of a Reporting Platform for Virtual Currency "Mining" Enterprises".

  The next day became the "big day" of the "coin circle".

On May 19, Bitcoin fell below the $40,000 mark, a 24-hour decline of nearly 25%; Ethereum plummeted nearly 39%; Shiba Inucoin fell by 53.73% in 24 hours; Dogecoin fell by 46.93% in 24-hours.

  Yang Jing told reporters that she actually smelled red flags on various currency forums before May 19, "Each platform has fallen into a frenzy, and some people with ulterior motives continue to promote the high returns of cryptocurrencies, which has led to many disagreements. Retail investors who understand cryptocurrency flooded into the market. This atmosphere is too problematic, so I quickly withdrew.” She told reporters that in the end, the crowd who entered the “created” hot market without a brain became “leeks.”

Experts remind: the currency circle lacks supervision, high risk, and difficulty in safeguarding rights

  The reporter noticed that the "routine" of the currency circle is far more than simply "buying coins" by fooling retail investors through forums.

There are also full-time "staff" in the "coin circle" who fool retail investors to "mining".

  On June 25, Ah Sing, who has a lot of fans and runs his own "mining" community, "Amway" his friends in the circle of friends: "Really, now mining is really super cost-effective!"

  However, on June 18th, due to the intensive Bitcoin mining that would lead to excessive energy consumption, many provinces in my country announced a large number of mining projects for the withdrawal of mining machines.

A series of virtual currency mining industry policies have been intensively introduced, and major mining provinces such as Inner Mongolia and Sichuan have responded. Virtual currency miners and mine owners have faced the difficult situation of "no electricity to mine".

But Ah Xin is still madly giving his fans "Amway" mining income, "If you invest in Bitcoin, you are using money to buy coins. After you have a mining machine, you are equivalent to a miner. The machine just doesn't work every day. Stop digging for Bitcoin for you, and you can store it later and look for a suitable opportunity to sell it."

  A Xin told reporters that after graduation from his undergraduate major in railways, he was introduced to the "coin circle" by relatives.

The post-95s generation claimed to have handled "numerous transactions" and even showed reporters a screenshot of the loss of more than 10 million yuan in his account on May 19th.

On a social platform where he talked about his experience in speculating coins, he posted a video with 28,000 views, 304 comments, and 222 likes. The title of the video is "Six months after fresh graduates bought 100,000 Bitcoins."

He said at the end of the video, "Future digital currency is an investment trend, and I am very optimistic about digital currency."

  Zheng Lei, chief economist of Baoxin Finance, pointed out in an interview with the media that the speculative nature of virtual currency far exceeds that of other financial currency market varieties. “The repeated long and short positions caused by irrational speculation. As an alternative investment target, The risks caused are more complex and diverse than traditional financial instruments."

  However, "UP masters" like Ah Sing are still using his simple and rude "Amway" method to "routine" a group of young people who are eager to get rich overnight.

  Hu Jie told reporters that at present, China has not issued strict regulations on personal holding, buying, and selling virtual currency, but it does not allow institutions or individuals to provide services for public transactions of virtual currency. "It cannot be made into a business. Provide a platform for buying and selling speculation.” Therefore, young people who are active in the “currency circle” must not only deal with the high risk of virtual currency price fluctuations, but also bear the risk of uncertainty caused by the speculation platform itself. “Some platforms It is not reliable in itself. It is registered overseas and there is no supervision. Some suddenly run away, some are hacked by hackers, where can domestic citizens go to defend their rights?"

  Hu Jie reminded the young people in the "coin circle" to "hype" a subject matter. First, it depends on whether the subject matter is worth it. "Give you a piece of waste paper and sell you 100 yuan. Do you think it is worth it? The waste paper may fall into the hands of whomever it falls. Because it has no value.” Second, it depends on whether the value of the subject matter being fired is consistent with the price. “A listed company is somewhat valuable. Yes, even so, its value and price may be upside down. But where is the value of virtual currency?"

  He believes that ordinary college students are almost unable to bear the losses caused by speculation. "Some people see that others make money from speculation, and they use living expenses to speculate. Once many students do this, they lose money and cause social problems. "He suggested that student groups try their best to stay away from such high-risk hype activities.

  In fact, strict supervision of the virtual currency market has become a global consensus.

The U.S. Treasury Department stated on May 20 that it will adopt stricter supervision measures on the cryptocurrency market and related transactions to prevent the breeding of illegal acts such as tax evasion; the Hong Kong Special Administrative Region government of China also recently proposed to combat money laundering and terrorism against virtual asset service providers Financing compliance supervision; South Korea confiscated virtual currency assets worth more than 53 billion won from 12,000 tax evaders in the country; the British financial regulator ordered the virtual currency exchange "Binance" to stop its regulated activities in the country ,and many more.

  Intern Zhang Xiaomeng, Zhao Qian, China Youth Daily and China Youth Daily reporter Wang Yejie Source: China Youth Daily

  Edition 06 on July 20, 2021