3.4 billion yuan in liquidation across the network! "My friend didn't listen to my advice and shorted with leverage and went bankrupt!" Bitcoin price exceeded 180,000 yuan per coin

Amidst everyone’s astonishment, the advancing Bitcoin has made history again.

After breaking through $25,000 on the 26th, Bitcoin trading volume continued to rise. At 18:00 on the 27th, Bitcoin broke through the $27,000 mark and was reported at $27,642 (about RMB 180,900).

Compared with the spectacular scene of "everyone shouting orders and sending red envelopes" a while ago, the enthusiasm in the cryptocurrency circle in this round of bull market has dimmed a lot.

“No one expected that Bitcoin would rise to become a copycat coin. The group is deserted and no one wants to get rich quickly because many people sold their coins at 20,000 yuan,” an investor told a reporter from China Securities Journal.

Cryptocurrency investors looked at each other in bewilderment: Who made money?

The entire network liquidated 3.396 billion yuan

After three years, Bitcoin finally ushered in a bull market.

According to CoinMarketCap data, as of 18:00 on the 27th, Bitcoin soared all the way, breaking through the $27,000 mark to $27,642 (about RMB 180,900), an increase of 11.7% in 24 hours. The total market value of Bitcoin reached $511.6 billion, about RMB 3.3 trillion, one trillion higher than Kweichow Moutai (market value of 2.3 trillion), equivalent to two Industrial and Commercial Banks.

Data source: CoinMarketCap

Bitcoin has been on a remarkable rise this year, becoming an asset that has benefited absolutely from the pandemic. Since hitting a new low of $4,705 on March 13, the current price of Bitcoin has soared by more than 584% since then.

On December 27, "Bitcoin will exceed 150,000 RMB by the end of the year" was ranked third on Zhihu's hot list, with a popularity of 11.3 million. Some netizens said: "The market for getting rich quickly is here again, more exciting than a roller coaster", and some netizens said: "Bitcoin is quite similar to Moutai shares. The more you think it can't rise, the more it rises."

Alternative.me sentiment survey showed that on December 27, the trading sentiment in the virtual currency market remained "extremely greedy" for more than a month.

However, during this round of surge, many Chinese virtual currency communities remain deserted.

“I didn’t expect that I would miss out on the bull market. The greatest sorrow of cryptocurrency investors is that the rise of Bitcoin made headlines, and various friends outside the circle asked me if I had made a lot of money playing Bitcoin, but I cleared my position when it was more than 10,000. Now Bitcoin is really not something that ordinary people can afford. It is a game for institutions on the other side of the ocean.” An investor told a reporter from China Securities Journal.

Missing out on the bull market is not the worst thing. The real tragedy is the lack of contracts. UAlCoin data shows that as of press time, in the contract market, the total liquidation of Bitcoin in one day was RMB 3.396 billion. Among them, the largest liquidation of short orders caused heavy losses, amounting to RMB 65.42 million.

The bears did not expect that Bitcoin has hit new highs recently and has no intention of falling back. "I really don't understand the recent market situation. The risk is too high. A friend who traded Bitcoin futures didn't listen to the advice and went bankrupt." said a Bitcoin investor.

Gu Yanxi, a practitioner in the blockchain and encrypted digital asset industry, said that it is very easy to add leverage in Bitcoin transactions, and the leverage ratio can be very large, which may increase the risk. In such a market environment, we need to stay sober to avoid taking big losses.

Suzie, chief experience officer of the virtual currency MXC exchange, also does not recommend that novices play with leveraged Bitcoin futures contracts. "With high leverage, the risk of contract liquidation is extremely high. If 10x leverage is used, a 10% market fluctuation will cause liquidation, and if 20x leverage is used, a 5% market fluctuation will cause liquidation. Newbies are not familiar with contract operations, market trends, position control, and stop-profit and stop-loss strategies. Operating such high-risk transactions will result in a high risk of liquidation."

Musk eyes Bitcoin

Will Tesla join the game?

As Bitcoin is gaining momentum, last week, Tesla CEO Elon Musk also publicly expressed his interest in Bitcoin.

Musk asked Michael Saylor, CEO of MicroStrategy, a US listed company, on social networking sites about the possibility of converting "large transactions" on Tesla's balance sheet into Bitcoin, and said: "The structure of Bitcoin is perfect, and of course there are some other currencies, but I'm not sure whether Tesla's involvement in the cryptocurrency circle is a good choice."

Michael Saylor advised Musk: "I have purchased more than $1.3 billion worth of Bitcoin in the past few months. Faced with unprecedented monetary expansion this year, every CEO faces the challenge of how to maintain and enhance shareholder value. Bitcoin is the best solution for every individual, investor and enterprise on the planet to store value."

The exchange between the two men excited the cryptocurrency community, with investors speculating that Tesla might buy Bitcoin.

Data shows that MicroStrategy has become one of the institutions holding a large number of Bitcoins since it began buying large amounts of Bitcoin in August. At the same time, the company's stock trading price has also seen a significant increase.

Citibank calls out sky-high price

Even though Bitcoin has seen such an astonishing increase, some analysts predict that Bitcoin may become the "Tesla of 2021," with room for several times higher growth in the future; some analysts have given ultra-high target prices of $74,000 and $100,000; the target price given by Citibank is even as high as $300,000.

Daisy, a senior analyst at Huobi Research Institute, pointed out: "The recent rise in Bitcoin may be driven by the following two factors: First, the resurgence of the epidemic in the UK has exacerbated expectations of a global economic recession, and global inflation has become an unstoppable trend. In addition, deflationary assets with anti-inflation properties are inherently scarce resources, so the demand for Bitcoin has further increased. Second, there are further expectations for Bitcoin compliant products. Grayscale Investments' parent company Digital Currency Group plans to launch a new wealth management subsidiary, which will join Grayscale and may bring more compliant products to the market in the future. The attitude of institutional users entering the market is significant. Many licensed investment institutions have established digital currency funds or applied to regulators for trading digital currencies and listed companies to allocate Bitcoin assets. These are unprecedented."

However, the above analysts also pointed out that a unilateral upward trend is not a sign of a healthy market. Instead, a certain market correction is a sign of a healthy market.

William, chief researcher of OKExResearch, also believes that this round of Bitcoin bull market can be said to be the product of high inflation expectations. Institutional investors care about profits, not sentiments such as "belief in Bitcoin" or "blockchain revolution". After the epidemic is gradually alleviated, as the economy gradually recovers, monetary policy will gradually shift from loose to moderately tight. At that time, institutional investors may sell Bitcoin.

Gu Yanxi pointed out that the biggest risk facing Bitcoin in the near future is still compliance risk. It is expected that in the next few years, US financial regulators will continue to strengthen regulatory measures on Bitcoin trading activities and venues, and such regulatory measures will definitely affect the price of Bitcoin.