Bitcoin price breaks through $51,000. Groups, mining and marketing... Beware of speculative risks amid high sentiment in the cryptocurrency circle

Source: Beijing Business Daily

Original title: Bitcoin rises above $51,000, grouping, mining and marketing... Beware of speculative risks amid high sentiment in the cryptocurrency circle

Recently, the cryptocurrency market has started to stir again. After Bitcoin broke through $50,000 on September 5, it once again reached $51,000 on September 6. The rise in the price of the currency has boosted the market sentiment. Currently, some cryptocurrency investors have started to form groups to recruit people, claiming to have "experts to lead people"; some mining farms are also ready to move, releasing promotional advertisements for "mining farm positions". In the view of industry insiders, under the multiple risks of policies, prices, and laws, everyone must calmly view cryptocurrency speculation, mining, and other behaviors, participate cautiously, and beware of being deceived.

Why the rise

The price of Bitcoin has risen again. On September 6, a Beijing Business Daily reporter noticed that after the price of Bitcoin broke through $50,000 the day before, at 2:20 a.m. on September 6, the price of Bitcoin rose again, from $50,264 to $51,848 at 6:30 a.m., and then fluctuated around $51,700. As of 20:00 on September 6, the latest price of Bitcoin was $51,219, a daily increase of 2.14%.

Keeping in line with the trend of Bitcoin, other currencies have also seen an upward trend in the past two days. Among them, the price of XRP was US$1.33, up 6% on the day; the price of BCH was US$767, up 8% on the day.

There are many different opinions in the industry about the rise in the price of coins. On the one hand, there are reports that the rise in the price of coins is related to the news about the release of virtual currencies by giant companies. Recently, Coinbase, the leading virtual currency trading platform in the United States, has obtained approval from the board of directors to purchase more than $500 million in virtual currencies again, further increasing its current holdings. At the same time, Coinbase also plans to invest 1/10 of its profits in virtual currencies, and as the virtual currency market continues to mature, this proportion will continue to rise. The continued purchase of such large institutions is undoubtedly a strong boost to the medium- and long-term market of Bitcoin.

In addition, there is a view that the rise of Bitcoin is related to the continued dovish stance of the Federal Reserve. As Pan Helin, executive dean and professor of the Digital Economy Research Institute of Zhongnan University of Economics and Law, pointed out, the current US inflation and unemployment rates have pointed to tightening, but the Federal Reserve is unwilling to tighten, making it difficult to issue US Treasury bonds. The Federal Reserve is currently releasing and easing US Treasury liquidity by purchasing bonds, so if it tightens at this time, it will cause greater problems for US Treasury bonds and the US dollar. In the dilemma, the easing cannot be withdrawn, which objectively affects the credit of the US dollar and enhances the recognition of Bitcoin as a potential alternative currency.

Market turmoil

Behind the price increase, the market is also stirring.

Beijing Business Daily reporters noticed that on social platforms such as Baidu Tieba and WeChat groups, there have recently been some chaotic phenomena of attracting members to the cryptocurrency exchange groups. Some use the gimmick of "getting Bitcoin for free", while others claim to have "experts leading the way" to attract new users to join the group to trade in cryptocurrency.

In addition to cryptocurrency speculation, the mining business is also constantly marketed, claiming that it can conduct "Bitcoin, Ethereum, IPFS knowledge mining exchanges, and even some mining farms openly launched "mining farm positions" promotional advertisements.

In addition to the increase in cryptocurrency marketing on social forums, there are also many new moves by cryptocurrency organizations on some vertical platforms in the cryptocurrency circle. For example, on September 6, a Beijing Business Daily reporter opened the Feixiaohao App and received a splash screen advertisement pushed by the platform. A cryptocurrency project called "Ulian" was highly recommended, claiming that "partners are being recruited. To become a partner, you can apply for an island in America. Sign up now and get 100%+ commission rewards..."

An industry insider told Beijing Business Daily, "As the price of Bitcoin has risen recently, many small currencies have also increased several times or even more than 10 times. Judging from the trading volume of some exchanges and industry statistics, the market trading volume has increased by 30%-40% compared with half a month ago. This week's currency price increase data may be higher, especially the contract trading volume."

Regarding the mining industry, the aforementioned practitioner said, "In fact, some small-scale mining industries have been in operation, and projects including Chia are also researching some new ways of playing. The market is hot again, and many people are studying how to circumvent regulation. What is certain is that there are still many people thinking about some new projects."

It should be noted that in addition to currency speculation and mining, the topic of NFT (Non-Fungible Token) has also been heard in the recent currency circle, and many currencies have seen their value soar under the NFT craze. Liu Feng, director of the Blockchain Technology and Application Research Center of Shanghai University of International Business and Economics, pointed out in an interview with a Beijing Business Daily reporter that the price of virtual currencies led by Bitcoin has rebounded and exceeded US$51,000 recently. It can be seen that some hot money has flowed back in the currency market's NFT enthusiasm, driving a strong rise in prices under the concepts of the metaverse and NFT.

But he also reminded that there are currently many NFT trading scams and frauds in the market, and everyone should be wary of being deceived.

Beware of risks

Whether it is virtual currency transactions or mining activities, the current domestic regulatory attitude is clear.

Since the beginning of this year, my country's regulatory authorities have continued to intensify their crackdown on virtual currency transactions and related activities, including Bitcoin, and have formed a multi-party joint force. In addition to banks prohibiting accounts from being used for virtual currency transactions, many places have investigated and investigated virtual currency mining institutions, exchange information has been hidden, and some exchanges have also closed contract transactions to new domestic users.

Pan Helin pointed out that Bitcoin has been regulated in China, including mining and C2C transactions. Although there are still some illegal incidents, the overall policy of my country is clear, that is, to prevent Bitcoin from being associated with the financial system and to prevent the risk of Bitcoin volatility from being transmitted to financial institutions in the future. He reminded cryptocurrency investors to be aware of the volatility risk of virtual currencies and also to pay attention to the compliance risk of virtual currencies in China. Transactions are not guaranteed, and C2C relies entirely on the trust between the two parties.

Liu Feng also said, "Considering that virtual currency transactions are not protected by law in our country, traders must be aware of fraud prevention in any form of virtual currency transactions. Considering the professionalism of virtual currency, traders should enhance their legal awareness and knowledge reserves to protect their property. First of all, they should improve their own cognition, and especially be cautious when participating in leveraged transactions."

Regarding subsequent supervision, Pan Helin said, "Our country will continue to crack down on transactions and adhere to the principle of prudence. Therefore, preventing virtual currencies from transmitting risks to the financial system and strictly prohibiting financial institutions from participating in virtual currency transactions and providing payment services will remain the key to subsequent supervision."

Beijing Business Daily reporter Liu Sihong