Opinion | Bitcoin at $20,000 is just the beginning

Bitcoin, the cryptocurrency with the highest market value, hit a new record high on Wednesday and broke through the $20,000 mark for the first time. In this regard, Bitpush interviewed California blockchain entrepreneur Ming Guo, Youbi Capital managing partner Gong Li, and DeFi Alliance partner Wang Qiao. They all believed that the driving factors behind this Bitcoin bull market are very different from the 2017 bull market, and $20,000 is just the beginning.

Ming Guo said in an interview with Bitpush that the entry of mainstream institutional investors from Wall Street is the main reason for the rise of Bitcoin.

He said: “The rise of Bitcoin is a landmark rise, which has a great positive effect on the entire encryption field and blockchain. It is actually equivalent to an endorsement of the entire blockchain ecosystem, bringing positive liquidity.”

He believes that the rise of Bitcoin to 20,000 this time may be a bubble, just like in 2017. In theory, all such assets are essentially bubbles. As competition with traditional payment currencies becomes increasingly difficult, Bitcoin will move forward on the path of alternative assets. In the entire blockchain ecosystem, where there is innovation, there is progress.

“However, I can make the assertion,” Ming Guo said, “that the probability of Bitcoin reaching $50,000 is higher now than it was five years ago.”

Gong Li, managing partner of Youbi Capital and global investment advisor of HashKey Capital, also accepted an interview with Bitpush . Founded in 2017, Youbi Capital is supported by the Bitcoin mining community and financial professionals and manages approximately $50 million.

She believes that this year's bull market is very different from the bull market in 2017. In the bull market in 2017, the price of Bitcoin rose from 10,000 to 20,000 in 2 weeks, which was driven by the bull market of altcoins and the ICO bubble. However, this year, after 3 years of precipitation, many projects have been implemented and applied. She is very optimistic about this bull market.

She told Bitpush: "I think this bull market is a slow one. It has gone through several adjustments and gradually approached this line. So I think it is a very smooth and natural transition, not a sudden rise like last time."

She said: "I think this bitcoin bull market is not a bubble, or it is much less of a bubble than the last one."

She believes that due to the severe inflation in the world today and the depreciation of local currencies, many people use Bitcoin as a hedge against inflation. In some areas with poor infrastructure, people use cryptocurrencies for cross-border transfers, the fees are very low, and there is a real demand.

Regarding the impact of the entry of traditional Wall Street institutions on the development of the entire cryptocurrency field, she said: "They can promote the rapid development of the industry and have a sound infrastructure. For example, Fidelity has reached an agreement with BlockFi across the border, and individuals can use BlockFi's cryptocurrency storage certificate to get loans from Fidelity. Securitize has also recently raised funds, which is also a channel for communicating real-world assets and cryptocurrencies."

Gong Li is very confident about this bull market due to the influx of institutional investors and the increasing interoperability between real-world assets and cryptocurrencies.

Wang Qiao, partner of DeFi Alliance, said in an interview with Bitpush that the current bitcoin price reaching $20,000 is completely different from the bull market in 2017: "This is just the beginning. Retail investors have not yet poured in in large numbers. It is mainly institutions that are buying. Retail investors in Asia are selling, and institutions in the United States are buying."

He analyzed that the large-scale purchase of Bitcoin by financial institutions will definitely raise the price and increase the recognition of the entire industry. Before June this year, there was still a great industry risk in buying Bitcoin. After June, the famous macro investor Paul Tudor Jones entered the Bitcoin market, which became a very important turning point and changed the views of many traditional investment institutions on Bitcoin.

He said: "The first thing financial institutions will buy is definitely Bitcoin, because Bitcoin has the largest volume and is relatively safest. Then they will look at other cryptocurrencies, such as Ethereum. This is a good thing for the entire industry. Bitcoin is an entry point."

He believes that institutional investors’ current purchase of Bitcoin on such a scale is just the beginning, and many institutions have not yet joined the train. Take gold as an example: “The volume of gold is now 20 times that of Bitcoin, but people haven’t bought enough gold yet, so I can’t imagine how much Bitcoin can rise.”

Ming Guo believes that Bitcoin is increasingly accepted by traditional financial markets and has become a credible asset. On the other hand, Bitcoin has made slow progress in its original payment field. First, its value comes from legal tender. The current attitude of regulators in various countries is that they would rather develop their own central bank digital currency (or strictly regulated proxy digital currency, such as Libra/Diem) than allow an essentially uncontrolled Bitcoin. Second, the higher the price of Bitcoin, the more it restricts it from becoming a universal payment currency.

In terms of decentralized applications, current innovations are mainly in decentralized finance (DiFi) on the Ethereum network and layer 2. However, rising Bitcoin prices always bring incentives to the entire cryptocurrency ecosystem.

"Bitcoin exceeding $20,000 brings "liquidity" injection to the entire cryptocurrency and blockchain ecosystem, because this iconic rise is usually a sign of incremental capital inflow, so it is a kind of "positive liquidity," Ming Guo told Bitpush.

Image source: pixabay

byAmy Liu

This article is an original article from Bitpush.News. Please indicate the source when reprinting it.