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Bitcoin prices continued to rise after breaking through the $10,000 mark last week, but market speculation has increased recently and short-selling forces have risen. Analysts believe that it will take some time for Bitcoin and other cryptocurrencies to gain widespread market trust, and investors should be wary of the speculative risks in the Bitcoin market.
This year, the global capital market has become more volatile due to multiple factors such as the escalation of trade disputes and the downward revision of global economic growth expectations. Bitcoin has shown its characteristics as a safe-haven asset, attracting the attention of many investors. In addition, the news that Facebook plans to issue the cryptocurrency Libra has greatly increased market enthusiasm, attracting more investors to enter the cryptocurrency market.
According to data from the US Bitcoin Base, the price of Bitcoin continued to rise sharply on the 25th. As of 20:00 EST, the price of a single Bitcoin was $11,816, an increase of more than 6% on the day. After breaking through the $10,000 mark last week, Bitcoin has continued to rise. This is the first time that the price of Bitcoin has exceeded $10,000 since the end of 2017.
The recent surge in bitcoin prices has attracted a large amount of speculative funds into the market. The latest futures position report released by the U.S. Commodity Futures Trading Commission shows that as of the 18th, non-commercial positions for speculative profits in bitcoin futures traded on the Chicago Mercantile Exchange have increased significantly, while commercial positions for hedging spot transactions have not changed, which means that the speculation in the bitcoin futures market has increased.
At the same time, both long and short positions in non-commercial positions increased compared with last week, but net short positions increased compared with the previous week, indicating that speculators' willingness to bearish on Bitcoin is heating up. At the same time, from the perspective of total position data, short positions also exceeded long positions.
Analysts warn that although the price of Bitcoin is rising rapidly, investors should be wary of the speculative risks in the Bitcoin market. This is partly because the Bitcoin market is small and easy to manipulate prices; and partly because the world has not yet established a sound regulatory mechanism for the Bitcoin market.
As of the 25th, the total market value of the global Bitcoin market was only $209.5 billion, less than one-fifth of Microsoft's market value. Lars Seyir Christensen, chairman of the U.S. blockchain network company Concordium, said that in the Bitcoin market, which is highly volatile and has a small trading volume, it doesn't take much effort to push the price up or down by $1,000.
In recent years, the price of Bitcoin has fluctuated dramatically: at the beginning of 2017 , the price of Bitcoin was less than $1,000. By the end of the year, the price broke the $10,000 mark for the first time and quickly approached $20,000. In 2018, the price of Bitcoin fell all the way to less than $4,000, and it was not until this year that it resumed its upward trend.
In addition, the Bitcoin and other cryptocurrency markets are also plagued by hacker attacks, security vulnerabilities, market fraud, and insufficient supervision. For example, Ernst & Young recently released a report saying that a Canadian cryptocurrency exchange had misappropriated customer funds. The well-known cryptocurrency exchange "Binance" also revealed in May this year that more than 7,000 Bitcoins were stolen by hackers.
With Facebook's recent announcement that it will launch the cryptocurrency Libra, cryptocurrencies have attracted the attention of central banks and financial regulators in some countries. Mark Carney, governor of the Bank of England, said that he remains open to cryptocurrencies , but that cryptocurrencies need to meet the "highest standards of regulation."
Federal Reserve Chairman Jerome Powell also said at a press conference last week that the application of cryptocurrencies has both potential benefits and potential risks, and cryptocurrencies should be treated from a safe and sound regulatory stance .
Although Bitcoin's new round of rise has once again become the focus of the market, investors' views are still divided: some fans have high hopes for it as "digital gold", but traditional investors represented by Warren Buffett regard it as a "gambling machine."
John Sedunov, assistant professor of finance at Villanova University in the United States, believes that there is reason to give Bitcoin more trust now than the last time it broke the $10,000 mark, "but I still don't believe this price is sustainable."
Michael Graham, an analyst at Canaccord Genuity Investments, said in an interview with the US media that Bitcoin has a good chance of being widely used in the future, but it is still a growing "grassroots experiment". (Jian Dan Finance)
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