At 8:00 am on February 9, 2021, Bitcoin broke through again, with a maximum quote of $47480.8, hitting the $50000 mark
At 8:00 am on February 9, 2021, Bitcoin broke through again, with a maximum quote of $47480.8, hitting the $50000 mark. As of 17:20, a Bitcoin was priced at $46553, surpassing Tesla in market value. At the current international gold price of approximately 1800 US dollars per ounce, the value of a coin can be exchanged for approximately one and a half jin of gold.
As of now, the market value of Bitcoin has exceeded $845.5 billion, ranking 7th, surpassing Facebook and Tesla (currently reported at $818.439 billion). The Big Brother platform, the imminent launch of US fiscal stimulus, the resurgence of global risk sentiment, and the continued easing of liquidity are all reasons for the surge. It is also expected that, given the intensification of leverage and speculative speculation, future inflation and liquidity indicators may be key variables that need attention.
Why is Bitcoin soaring again?
At the end of 2020, the price of Bitcoin skyrocketed, reaching a peak of over $40000. It then fluctuated repeatedly for a period of time and reached a new high on February 9th.
Bitcoin breaking a new high is closely related to the recent remarks of the newly emerged world's richest man and Tesla CEO Musk. On January 29th, after Musk changed his Twitter profile to "# bitcoin", Bitcoin rose by 18%. Subsequently, Musk continued to "buy" digital currencies, first mentioning "Dogcoin" six times a day on February 4th. On February 8th, Tesla invested a total of $1.5 billion in Bitcoin, once again pushing Bitcoin to a high of $42000. It is precisely because Musk has a strong appeal in Europe and America that he has led a large number of "fans" to buy digital currencies, leading to the rise of Bitcoin and Dogcoin.
In addition, the positive effects of the US fiscal stimulus policy also play an important role. Last Friday, the US Senate forcefully passed Biden's $1.9 trillion fiscal stimulus plan with a 51 to 50 vote.
William, a senior researcher at Ouyi OKEx Research Institute, told First Financial reporters that it can be said that the direct reason for this round of Bitcoin bull market is the entry of high net worth and institutional investors like Tesla - since the second half of 2020, institutions such as American insurance giant MassMutual Life Insurance and business analysis company MicroStrategy have been buying Bitcoin one after another. According to Bitcoin Treaties, over $6.9 billion of Bitcoin is currently held by listed companies. This has brought prosperity to the Bitcoin market.
The underlying reason behind traditional institutions' large purchases of Bitcoin is the changing global macroeconomic situation this year. On the one hand, due to the impact of the epidemic, the global economic recovery will slow down in the coming year; On the other hand, the central bank's extremely loose monetary policy has pushed up inflation expectations in financial markets. In the economic environment of high inflation and low growth, in order to avoid the damage to nominal principal and pursue higher returns, investors' demand for hoarding cash naturally evolved into a demand for gold and Bitcoin.
The most obvious example is the latest disclosure document from Tesla, a subsidiary of Musk, to the US SEC: "In January 2021, we updated our investment policy, providing us with greater flexibility to further diversify and maximize cash returns.
It may seem ridiculous that a single Bitcoin can buy a pound and a half of gold, but the logic of insiders has changed. Founder of Distributed Technology, Da Hongfei, told First Financial that over the course of more than a decade of development, Bitcoin has gradually withdrawn from competition with fiat currencies and is more inclined to develop in value reserve functions. In the future, Bitcoin is more likely to serve as a form of reserve assets, similar to gold. However, the difference between Bitcoin and gold is also very obvious. Gold has condensed thousands of years of human consensus on value. Based on cryptography and distributed networks, Bitcoin is resistant to censorship and easy to transfer. It has become an important new asset in the digital wave, but there is also a huge foam.
Inflation and liquidity are key variables
Relevant statistics also show that the current level of popularity among retail investors compared to the cryptocurrency and cryptocurrency industries is higher than ever before.
"We should be soberly aware that Bitcoin is a high-risk asset rather than a hedge asset; and as a special asset class, unlike stocks or bonds, Bitcoin does not generate any predictable cash flow, and the only way for investors to get returns is the rise in the price of Bitcoin, so it is easier to form a speculative foam," William said that in market research, it is often found that some plus 10 times Investors who speculate on currency with leverage of 20 or even 100 times bring huge investment risks.
At present, there is a certain divergence of views among various sectors regarding virtual currencies such as Bitcoin. Various sectors believe that inflation and liquidity will be the most critical indicators in the future.
William said that after Bitcoin prices broke through $20000 in December last year, a large number of new investors began to flock. There are some signs that there may have been structural changes in the main investment force of the market, which may shift institutional investors towards small and medium-sized investors. Different main market forces have a considerable impact on market sentiment and price trend.
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