Is Bitcoin really going to be “positive”? Visa accepts cryptocurrency payments, and Bitcoin prices soar again

On March 29, after several days of tug-of-war, Bitcoin once again broke through $57,000 per coin, rising nearly $800 in the short term and up more than 2% on the day.

In the past half month, the price of Bitcoin has fallen to a minimum of nearly $50,000 after breaking through $60,000. For a period of time, the price has been in a stalemate and fluctuated frequently. On March 26, Bitcoin fell to its lowest point in a week at $50,772. Since then, as market information revealed that the European Central Bank's pace of preparing for the digital euro has accelerated, the price of Bitcoin has risen again, and the price of Bitcoin once exceeded $57,800.

On March 29, there was news that VISA allowed the use of cryptocurrencies for payment settlement. Influenced by this news, the price of Bitcoin rose in the short term, breaking through US$57,800 per coin.

VISA to accept cryptocurrency payments

According to Reuters, Visa said on Monday that it will allow users to use the cryptocurrency USD Coin to settle transactions on its payment network, the latest sign of the mainstream financial industry's growing acceptance of digital currencies. The company said Visa has launched a pilot program with payment and encryption platform Crypto.com and plans to offer the option to more partners later this year. USD Coin (USDC) is a stablecoin whose value is directly linked to the US dollar. As of press time, VISA rose 2.67% in pre-market trading.

Huobi Group co-founder Du Jun told China Securities Journal that the three major U.S. stock indexes have rebounded to a certain extent, and BTC, which has a strong linkage with U.S. stocks, has also risen slightly today. Visa announced today that it will allow the use of cryptocurrency-based stablecoins to settle transactions on its payment network, thereby eliminating the need to convert digital currencies into traditional currencies to complete transactions, which shows that the mainstream financial industry is increasingly accepting digital currencies. In addition, following the $1.9 trillion new crown relief bill, investors' concerns about the tightening monetary environment caused by previous inflation have been further resolved, and these factors have led to a certain rebound in BTC.

Alan, chief researcher of Binance China Blockchain Research Institute, told the reporter of Securities China that Visa will officially allow the use of stablecoin USDC to settle transactions on its payment network. In the future, the compliance and ease of use of compliant stablecoins will increase their market share and user population. Currently, payment giants Visa, Paypal, and MasterCard have all supported payment or settlement of cryptocurrencies, allowing more people to recognize the combination of cryptocurrencies and traditional fields. As the largest cryptocurrency, Bitcoin will also be known to more users outside the circle. Most of the financial circles related to cryptocurrencies will directly affect the decision of retail investors to buy in large quantities, bringing benefits to the rise of Bitcoin.

Coincidentally, on March 24, Musk said on social media that users can buy Tesla cars with Bitcoin. And the Bitcoin paid by users to Tesla will be retained as Bitcoin and will not be converted into legal currency.

Shortly after Musk posted the message, the price of a single Bitcoin rose 3% to $56,242, enough to buy an entry-level Tesla.

"With global electric car giant Tesla, the world's largest asset management company Blackstone Group, Norwegian oil giant Akar and other companies investing in Bitcoin, Bitcoin is gradually evolving from a niche alternative investment to a 'digital gold' for the general public. Therefore, against the backdrop of rising inflation expectations in the future, Bitcoin, which has a fixed total upper limit, has become a good asset to combat inflation, and is sought after by the market, with its price continuing to rise," a senior analyst at OKEx Research Institute told a reporter from Securities China.

If the global economy reaches a turning point, the main reason supporting BTC's rise may disappear

China Securities Journal reporters learned that the market generally believes that for future market development, it is necessary to refer to whether the expectations of global market fundamentals have changed. Loosening money is not a sustainable state. If the global economy reaches a turning point, the main reason supporting BTC's rise may disappear. Investors are advised to pay close attention to changes in macroeconomic policies.

What should investors who hold Bitcoin pay attention to? Du Jun said that for the first time, Bitcoin is a high-risk and highly financialized digital asset. Any financialized product will rise and fall, and price fluctuations are very normal. In the rising market in 2017, the price of Bitcoin has experienced several sharp corrections of 20% to 30%. After Bitcoin quickly rose from $10,000 to $42,000 at the end of 2020, a large amount of profit-taking risks have accumulated, and a deep correction is inevitable. The recent rise of Bitcoin to $60,000 may also experience a period of ups and downs.

Secondly, the fierce competition between the logic of global liquidity and global regulation will also lead to drastic fluctuations in the price of Bitcoin. Therefore, taking all these factors into consideration, the price of Bitcoin cannot escape the cyclical law and will inevitably rise and fall and continue to fluctuate. Under this circumstance, Bitcoin is very likely to form a speculative bubble, and investors need to look at the price fluctuations rationally.

Currently, there is a wave of high attention to Bitcoin around the world. However, Michael Sonnenshein, CEO of Bitcoin giant Grayscale, believes that many investors are attracted to crypto assets due to the verifiable scarcity of Bitcoin. "Bitcoin is a high-risk financial product with large price fluctuations. Therefore, investors need to rationally manage their investments based on their own investment philosophy and control strategies, treat Bitcoin market conditions with caution, respect the market, know themselves and their opponents, understand global market changes, and combine their own investment characteristics to form an effective trading system to obtain their own maximum benefits." Du Jun said.