Bitcoin rises above $56,500, with a total market value exceeding two Moutai

Source: Daily Economic News

Original title: Crazy again! Bitcoin price breaks through $56,000, with a total market value exceeding two Moutais. The world’s first Bitcoin ETF is launched, and this private equity tycoon strongly supports buying it.

If we talk about the most popular investment product this year, it must be Bitcoin. After breaking through $50,000, Bitcoin did not stop rising. In the early morning of February 20th, Beijing time, Bitcoin hit a new record high, rising to over $56,000, and the total market value of the currency reached the $1 trillion mark.

As of press time, Bitcoin's increase has fallen back to 7.15%, at $55,567.5, with a total market value of $1.04 trillion. This number is second only to Google's market value of $1.4 trillion, and higher than Tesla's market value of $750 billion, ranking fifth in U.S. stocks.

Calculated based on the closing price of Kweichow Moutai on February 19, the total market value of Bitcoin is equivalent to 2.17 times the total market value of Moutai.

According to data provided by Bitcoin Home, as of 6:50 a.m. on February 20, 131,645 people had their Bitcoin contracts liquidated across the entire network within 24 hours, with a total liquidation amount of US$841 million (approximately RMB 5.428 billion), and a liquidation amount of US$16.318 million (approximately RMB 105 million) within one hour.

Bitcoin is rising rapidly, and related positive factors are also being released. Since February, Canadian regulators have approved the issuance of the world's first crypto asset (virtual currency) Bitcoin exchange-traded funds, officially opening a new chapter in digital currency trading.

At the same time, Musk continues to "endorse" Bitcoin crazily; "new bond king" Jeffrey Gundlach joins the ranks of Bitcoin bulls, believing that Bitcoin may become the next "economic stimulus asset"; Microsoft co-founder Bill Gates changes his bearish opinion on Bitcoin to a neutral attitude.

Dan Bin, a domestic private equity tycoon and chairman of Oriental Harbor Investment Management Co., Ltd., is also optimistic about Bitcoin. Recently, Dan Bin said on Weibo: "I have purchased 1% of the Bitcoin ETF fund. Although it is a bit late, I will practice it once I figure it out! I hope to maintain my curiosity about new things!"

Bitcoin ETF Launches

Dan Bin publicly favors

For a large number of retail investors, the threshold for directly purchasing cryptocurrencies is high, the process is cumbersome, and they may be hacked and lose their electronic keys. Therefore, ETFs with lower holding thresholds are about to emerge.

On Thursday (18th) local time, North America's first Bitcoin ETF, Purpose Bitcoin ETF (code BTCC), was officially listed on the Toronto Stock Exchange in Canada. The total trading volume on the first day was 9.3 million shares, with a total transaction amount of US$145 million, making it one of the top ten most active securities traded on the Toronto Stock Exchange that day.

Industry insiders believe that this will make it easier for retail investors to hold coins. Market observers said that with the successful listing of BTCC and the changing attitudes of more and more Wall Street bigwigs towards Bitcoin, the listing of ETFs in the United States is just around the corner.

Previously, Ark Investment Management, run by Cathie Wood, known as the "Queen of the Bull Market", released a research report stating that if all companies in the S&P 500 index allocated 1% of their cash to Bitcoin, the price of Bitcoin would rise by $40,000; if these companies allocated 10% of their cash to Bitcoin, the price of Bitcoin would rise by $400,000 accordingly.

Dan Bin, a domestic private equity tycoon and chairman of Oriental Harbor Investment Management Co., Ltd., publicly expressed his approval of this. Recently, Dan Bin said on Weibo: "I have purchased 1% of the Bitcoin ETF fund. Although it is a bit late, I will practice it once I figure it out! I hope to maintain my curiosity about new things!"

He said: "As Tesla allows Bitcoin as a payment 'currency', its value may be increased. The total number of Bitcoins in the world is 21 million, and 15.85 million have been mined as of July 13, 2020. If the number of long-term holders increases, or companies like Tesla continue to join, it is very possible to reach the $400,000 mentioned by ARK's 'Bull Queen'..."

In another Weibo post, in response to a netizen’s question, “Mr. Dan, I remember a few years ago you said on Weibo that a friend told you that Bitcoin would rise to more than 1 million, but I felt you didn’t understand it at the time,” Dan Bin responded: At that time, I really didn’t understand it, but today I think what the APK “Bull Market Queen” said makes sense!

Image source: Photo Network

Musk once again supports

The entry of giants into the market is considered to be a key factor in the recent surge in Bitcoin.

"Bitcoin is a higher version of gold." DoubleLine Capital CEO Gundlach has joined the ranks of those who are bullish on Bitcoin. He was a long-term gold bull and dollar bear, but he recently said he is neutral on both. He believes that Bitcoin has risen wildly as countries have injected huge liquidity into the financial system during the COVID-19 pandemic, and the cryptocurrency may become the next "economic stimulus asset" in the future.

Bill Gates once harshly criticized Bitcoin, claiming that he would short Bitcoin if he could, but he changed his tune recently. He revealed in an interview: "I don't have Bitcoin, and I don't short Bitcoin. So, I hold a neutral view."

According to regulatory documents from the U.S. Securities and Exchange Commission, Tesla has invested $1.5 billion in Bitcoin and will begin accepting Bitcoin as a payment method for purchasing electric vehicles in the near future.

Musk commented on this on social media:

Tesla's move does not directly reflect my view. Bitcoin is just a form of liquidity that is less dumb than cash, and it is a risky move for S&P 500 companies to hold some Bitcoin.

Musk then further elaborated on the simple logic behind his massive investment, adding that when real interest rates on fiat currencies are negative, only a “fool” would not look elsewhere.

To be clear, I'm not an investor, I'm an engineer. I don't even own any publicly traded stocks other than Tesla.
However, when real interest rates on fiat currencies are negative, only a fool would not look elsewhere.
Bitcoin is almost as much bullshit as fiat currency. Note, the key word is “almost”.

Industry insiders warn of risks

Although many well-known figures in the technology and financial circles have changed their views on Bitcoin, there are still many institutional people who believe that Bitcoin is not omnipotent under the background of global quantitative easing, and its bubble deserves more attention.

On February 10, Nouriel Roubini, a well-known American economist known as "Dr. Doom", said in an interview with the Financial Times: "Bitcoin is not a hedge against risks. Tesla founder Elon Musk may be buying Bitcoin, but that doesn't mean everyone should follow suit. Given its huge environmental costs, the fundamental value of Bitcoin is negative."

He reminded enthusiastic investors: "The price of Bitcoin is completely manipulated by a group of giant whales. It has no fundamental value and is close to the moment when the hyperbolic bubble bursts."

Previously, Ray Dalio, founder of Bridgewater Associates, the world's largest hedge fund, expressed his views on Bitcoin. In his article, he said that Bitcoin is a wonderful invention that may meet the demand for gold-like asset substitutes. At present, Bitcoin has successfully crossed the concept of speculation. However, although the supply of Bitcoin is limited, the supply of digital currency is not limited. There may be better cryptocurrencies to replace Bitcoin in the future. Bitcoin is at risk of being replaced by other virtual currencies. In addition, it faces limitations such as network risks, privacy protection issues, and lack of policy support.

When Bitcoin soared to $40,000, Yang Delong of Qianhai Open Source Fund said that Bitcoin, as a cryptocurrency and the most popular digital currency, has seen a sharp rise in price in the past, and has become somewhat bubbled. Since Bitcoin has no reference indicators, it is difficult to say how reasonable the price is, but the short-term increase is indeed too large, and investors are advised to remain cautious and not to participate in excessive speculation.

(The content and data of the article are for reference only and do not constitute investment advice. Investors act accordingly at their own risk.)

Editor | He Xiaotao, Xiao Yong, Wang Jiaqi

Proofreading | Sun Zhicheng