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The picture shows the trend of Bitcoin in the past three months
"One year in the sky, one year in the ground, in just two and a half years, I have experienced a round of replacement of the bull, bear and bull markets of Bitcoin. This situation cannot happen in the stock market," Bitcoin holder Zhao Ming told Deep Net.
On March 31, 2017, Zhao Ming bought two bitcoins for $1,350. Three months later, the price of the two bitcoins nearly doubled. But the price trend of bitcoin in the second half of 2017 stunned Zhao. At the end of 2017, the price of bitcoin once exceeded $19,000. "I feel like I missed out on several hundred million," Zhao Ming said, beating his chest and stamping his feet.
At that time, Bitcoin had become a game exclusively for high-net-worth individuals. Masayoshi Son, founder of SoftBank Group, bought Bitcoin on the recommendation of Peter Briger, a Bitcoin supporter and co-chairman of asset management company Fortress Investment. However, even Masayoshi Son could not understand the Bitcoin market afterwards.
After reaching its highest point of $19,666 on December 29, 2017, the Bitcoin industry plummeted. Two months later, on February 28, 2018, Bitcoin closed at $10,314.9. Some media reported that Masayoshi Son chose to close his positions in early 2018, with accumulated losses exceeding $130 million (about 874 million yuan).
Throughout the second half of 2018, Bitcoin has been in a state of volatility and plunge. On December 31, 2018, the lowest price of Bitcoin was $3,122.3, down 84% from the highest point of $19,666 in 2017. In 2019, the price of Bitcoin continued to rise. On April 5, 2019, Bitcoin closed at $5,193.7, breaking the $5,000 mark. On June 21, Bitcoin closed at $10,225.4, returning to the $10,000 mark.
It took Bitcoin just over two months to go from $5,000 to return to the $10,000 mark.
For a time, the search popularity of Bitcoin began to soar, and the enthusiasm of the general public for cryptocurrencies was rekindled. The "cryptocurrency bigwigs" who had been silent in public for a long time began to get restless, and even the mining machines that were once unsaleable became popular again.
Has Bitcoin entered a "bull market" again? How long can this crazy rise last? A drama about desire and wealth is being re-enacted in the cryptocurrency circle.
Who is driving this round of Bitcoin surge?
In the first half of 2019, Bitcoin started to rise after hitting the bottom at $3,414.82 on February 1. On April 5, Bitcoin broke through $5,000 and closed at $5,193.7, with a daily increase of 26.8%, setting a record for the highest single-day increase in the past six months. Since then, Bitcoin has been like a wild horse running wild, and its price has skyrocketed. On June 21, Bitcoin once again broke through the 10,000 mark and closed at $10,225.4. Five days later, the price of Bitcoin reached a high of $13,861.9. After June 27, the price of Bitcoin began to fluctuate and fall, but it has been around $10,000.
Looking at the price trend of Bitcoin in the first half of 2019, it can be found that June 21 was an important node. On this day, the price of Bitcoin once again exceeded US$10,000.
"This round of Bitcoin price increase is mainly the result of multiple factors, including the expectation of interest rate cuts by the Federal Reserve, the involvement of institutional investors, asset allocation by high-net-worth individuals, and the preparation of the Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange, to launch futures with physical delivery," Xiao Lei, a senior digital currency analyst, told Deep Net.
The intervention of institutional investors and asset allocation of high-net-worth individuals have pushed up the price of Bitcoin . This logic is easy to understand.
Grayscale Investments, a US crypto asset management giant, publicly revealed that it purchased more than 11,000 BTC in April 2019, accounting for about 21% of the global monthly supply of BTC.
In addition, JPMorgan Chase, Facebook, IBM and other institutions have also announced their entry into the cryptocurrency field. With the endorsement of these large companies, institutions and high-net-worth individuals, confidence in the cryptocurrency market has gradually been restored.
But why do expectations of a rate cut by the Federal Reserve and the launch of physically delivered futures by ICE lead to an increase in Bitcoin prices ?
Strictly speaking, Bitcoin is a crypto asset with similar properties to gold and crude oil. When the U.S. dollar is at risk of default or expected to depreciate, the demand for gold, crude oil and Bitcoin will increase. The Federal Reserve may cut interest rates in July, and the U.S. dollar has continued to fall. This has also led to gold hitting a six-year high, crude oil soaring, and Bitcoin prices soaring.
"Bakkt, a crypto asset trading platform developed by Intercontinental Exchange, is advancing plans for physically settled Bitcoin futures products, and user acceptance testing may be launched in July. In the long run, this will help individual and institutional investors purchase Bitcoin-related products," Xiao Lei told Deep Net.
Unlike the Chicago Mercantile Exchange (CME), which launched its Bitcoin futures contract on December 18, 2017, the previous futures trading of the Chicago Mercantile Exchange was to buy Bitcoin futures with US dollars. Bakkt's vision is to conduct "physical" delivery of Bitcoin futures, directly settle with Bitcoin, and buy Bitcoin futures with Bitcoin. This approach can encourage everyone to hold Bitcoin and make Bitcoin more popular.
But from the perspective of the U.S. Commodity Futures Trading Commission (CFTC), this approach involves complex regulatory issues and requires more time to review.
Confused retail investors
Regardless of the logic behind this round of surge, what retail investors want to know most is how long Bitcoin can continue to rise, whether it will return to the high of nearly $20,000 at the end of 2017, and when is the best time to sell Bitcoin?
With the current rise of Bitcoin, players have paid to join various cryptocurrency investment groups, hoping to get some clues from "knowledgeable" seniors or cryptocurrency celebrities, dreaming of entering the ranks of "financial freedom".
"I did have a gambling mentality when I bought Bitcoin in the early stage, because I knew very little about cryptocurrencies . But after experiencing the roller coaster market from 2017 to 2018, I became cautious. I wanted to take advantage of the $10,000 market for Bitcoin to sell some of it. I wanted to sell it through over-the-counter transactions and exchange it for RMB, but I was worried that the account would be frozen when I bought again in the future," Zhang Tu told Shenzhen Net.
At noon on July 2, 2019, according to Phoenix.com blockchain news, the operator of Plus Token, a cryptocurrency fund, was arrested in Vanuatu, involving tens of billions of dollars. Bitcoin then began to fall, and the price once fell below $10,000.
Retail investors who have "got on board" always think that this round of market trend has not reached its peak and are full of hope for the price of Bitcoin ; retail investors who have missed out on the opportunity hope for a market correction, find the right opportunity to enter the market, and catch the "express train" of this surge.
Huang Xiao invested 100,000 yuan to buy a certain token during the "ICO wealth-making boom" in the first half of 2017. Later, the state stepped in to regulate ICO, and only 20,000 yuan was left, so he decisively cashed out.
"After I lost money, I swore that I would never buy altcoins again and would only buy Bitcoin. But now, most of the people around me who can hold Bitcoin are those who have already achieved 'wealth freedom'. Some of my friends hold Ethereum , Litecoin , etc. The current price of Bitcoin is no longer something that small retail investors and the general public can afford." Huang Xiao said.
An industry insider told Deep Web that most people who buy Bitcoin now are high-net-worth individuals, and it is meaningless for ordinary people to buy a small amount of Bitcoin, which is not enough to cover the handling fee. So after this wave of Bitcoin price increases, slightly more powerful retail investors began to pay attention to Ethereum and Litecoin , but a large number of people began to pay attention to other cheaper " altcoins ".
According to Etherscan data, 1,004,170 transactions were confirmed on the Ethereum blockchain on June 29. Prior to this, the last time the daily transaction volume on the Ethereum blockchain exceeded 1 million was in May 2018.
The return of the cryptocurrency industry’s “celebrity”
This round of Bitcoin surge has not only made various " altcoins " popular, but also some "celebrities" in the currency circle who have been silent from the public eye for a long time have begun to "call orders" for themselves by taking advantage of this round of Bitcoin surge. Among them, Yuhong, the initiator of the "Three O'clock Group", is the most prominent.
During the Spring Festival of 2018, Yuhong became famous for initiating the "3 o'clock blockchain group", and was later criticized for "cutting leeks" because the XMX project she issued subsequently broke the issue price. In the following six months, XMX hovered around 0.000001ETH most of the time, almost returning to zero. Even if there were a few increases, they were short-term surges and plunges, and they no longer aroused the interest of investors.
On June 20, someone in a cryptocurrency trading group first noticed the unusual movement of XMX. On that day, XMX, which had been silent for more than half a year, soared from 0.00000124ETH to 0.00000266ETH, an increase of about 114%.
Violent price hikes are the best marketing method for retail investors who do not understand the logic of “ altcoins ”. Two days later, Yuhong frantically sent messages in the community every day, and promised that she would open a position after XMX doubled five times, implying that she would support the market.
The effect of Yuhong's "calling orders" is obvious. According to the market data of Huobi Global Station, XMX rose rapidly on the day when Yuhong appeared on the 22nd, with a daily increase of 77%. In the next 5 days, XMX gained great attention with a 6-fold increase.
What is the purpose behind Yuhong's coming out at this time? According to BlockBeats, Yuhong's move is related to the Bitcoin mining project she is working on. Yuhong had previously raised funds from the industry, wanting to set up a RMB 5 billion fund, mainly for investing in Bitcoin mining. Later, there were few applicants, and no money was raised at all. At present, the scale of Yuhong's mining farm may not even be 100 million yuan.
So Yuhong launched the "XMX-BTC" plan. An insider revealed that Yuhong wanted to increase the price of XMX and let investors buy XMX and lock positions, and use the money raised from selling XMX to buy mining machines and set up a mining farm. At present, the initial idea of this plan is that Yuhong sends WeChat messages every day to find 1,000 people to buy 10 million XMX each to lock positions (based on the highest price of XMX on July 2, 0.0146 yuan, 10 million XMX is about 146,000 yuan, and 1,000 people is 146 million yuan). These people can also buy mining machines with him to mine and share the profits of the mining farm.
Not only the "celebrities" in the currency circle are optimistic about the Bitcoin mining farm and mining machine business, but the enthusiasm of some retail investors for "mining" has also been aroused by this round of Bitcoin's surge. The most intuitive manifestation is the sharp rise in the price and demand for mining machines.
In this regard, Huoxun Finance CEO Long Dian said that the current cost of mining one bitcoin is about 30,000 yuan, and the market price of bitcoin is already higher than this price. Many large customers will choose to open their own mines to mine, which will naturally bring great demand to mining machine manufacturers.
Stimulated by huge demand, the prices of second-hand mining machines have been rising since April. A senior investor from a large VC institution in Beijing who has invested in mining farms told the Securities Times that with the rise in Bitcoin prices , the prices of mining machines have also risen. Currently, mainstream mining farms in China want to increase their purchases, but the supply of mining machines is difficult to keep up. For example, the price of a traditional S8 mining machine has soared from less than 800 yuan at the end of last year to 3,000 yuan.
Deep Web checked Bitmain's official website for Antminer and found that many models of mining machines, including Antminer S9 SE, S9k, S17, and T17, are sold out. It is reported that orders for new-generation mining machines from major mining machine manufacturers such as Canaan Creative and Shenma Mining Machine have been scheduled until October.
“The current situation seems to have returned to the second half of 2017, when the market demand for mining machines was three times the supply,” said Steven Mosher, head of global sales and marketing at Canaan Creative.
Benefiting from the sharp increase in mining machine orders, the three major mining machine giants, Bitmain, Canaan Creative and Ebang International, may restart their journey to listing.
As of June 21, 2019, the applications of Bitmain, Canaan Creative and Ebang International for listing in Hong Kong have all expired. According to foreign media reports such as Bloomberg and Reuters, the three companies have expressed their consideration of listing in the United States. As of press time, Bitmain and others have not responded to this.
Bull Market Controversy
After the cryptocurrency market experienced a brief capital frenzy and agitation, the general public, especially retail investors, are more concerned about how long this round of Bitcoin's rise will last? Can Bitcoin return to its high of 20,000?
Naeem Aslam, chief market analyst at ThinkMarkets, said in an interview with Fox Business Channel that "Bitcoin (BTC) will reach between $60,000 and $100,000 in the next bull run." Aslam said that the current main price points are $20,000 and $50,000. In addition, Aslam also pointed out that unrest and even potential war in the Middle East are the biggest drivers of growth for diversified assets, including Bitcoin. "He also said that this bull run is conservatively estimated to push the price of Bitcoin to an all-time high.
But Bloomberg quoted Whitney Tilson, founder of Emire Financial Research, as saying not to be fooled by this year's "dead cat" bounce, and said prices will be much lower a year from now.
Charles Cai, senior analyst at OKex, believes that the resistance level of this round of Bitcoin's rise is likely to appear in the range of US$10,000-11,700. In particular, the closer to the upper edge of the range, the greater the probability of a pullback. When holding cryptocurrencies , you should also pay attention to the risk of a pullback.
UBS Chairman Axel Weber previously warned against Bitcoin: Bitcoin is a speculative investment and cannot be classified as a currency. Retail investors do not fully understand these products, so they should be protected from this market.
Source: Tencent Technology |
