After being blocked in China, Bitcoin price hits a new high, and the manipulator behind it finally appears

Former U.S. Secretary of State Henry Kissinger once commented: “Whoever controls oil controls all countries; whoever controls food controls humanity; whoever controls the right to mint currency controls the world.”

With the development of science and technology and the improvement of agricultural technology, oil and grain as tangible commodities may not have such important strategic significance. The game between countries has entered the field of virtual, programmed and intelligent. The confrontation of coinage rights is far more important than oil and grain, but the competition for coinage rights has already escalated to the level of virtual currency. The competition for control of Bitcoin has gradually moved from the backstage to the front stage.

On the same night that the last two Chinese Bitcoin exchanges closed, the Chicago Board of Trade announced that it would launch Bitcoin futures in the fourth quarter.

In this world, only time will not lie. Neither will what happened at what time lie.

Following the main line of time, the police can solve cases and investors can figure out many things.

Especially in the Bitcoin market, the thermonuclear fusion-like spread has begun to impact mainstream countries. How these countries view and use Bitcoin has become the climax of all stories. Various major events are linked together and thrilling.

Many people may think that only people in this circle think these things are big things. Many people don’t even know what Bitcoin is. Is it interesting to care about this? In fact, in June last year, the market value of Bitcoin was only 10 billion US dollars. In less than a year and a half, it has risen to nearly 120 billion US dollars, soaring more than ten times.

Moutai's stock has performed very well recently, but at this moment, Moutai's market value converted into US dollars is less than 120 billion US dollars. You must know that Moutai is a century-old company and it is China's highest-priced stock, with countless fans.

If the current momentum continues, one day in the future you will find that those who hold Bitcoin and those who do not hold Bitcoin may be two completely different classes.

As an ordinary investor, what I care about is whether investing in Bitcoin can make money. But from the perspective of a country, what I care about is whether this thing can be used by me, whether there are some unfavorable factors behind it, what to do if I can't control it in the future, etc.

If we look at Bitcoin as a currency, even if it has bubbles, it is different from general investment targets. The bubble of currency is often caused by excessive issuance, which leads to hyperinflation. Paper money is completely linked to the government's credit, and its cyclicality is very obvious.

Ten years ago, the RMB pool ( M2 ) was only 40 trillion, and now it is 165 trillion, an increase of more than four times. If the amount of legal currency is increasing and there is no set of rules and logic that can continue to convince users, then the distrust of legal currency will lead to long-term popularity of non-credit currency assets such as gold and Bitcoin.

Bitcoin, like gold, does not have the problem of excessive issuance. The issuance volume is known and will not be affected by the government's credit. Its valuation mainly considers the value of existing legal currency. This makes Bitcoin naturally unpopular in the legal currency market. Unless there are sufficient methods and capabilities to control it, it will be banned. If a country can control Bitcoin freely, Bitcoin will become a new nuclear weapon in the currency war. This has been discovered by Japan and the United States, or it has been discovered long ago.

Like gold, Bitcoin has caused great trouble for the government to develop sovereign currencies, and has begun to serve as a tool for financial sovereignty games. When the US dollar uses gold and crude oil to consolidate its hegemony in the world, other sovereign currencies can only become subordinate to the US dollar. Many people have begun to predict that the future hegemony of the US dollar will rely on carbon emissions, food, etc. The United States will make a fuss about carbon dollars and food dollars to continue to control the world.

I have said many times in many of my previous analyses that what will replace the US dollar is definitely not the next US dollar.

In order to curb China's growing influence in the Bitcoin market, the Bitcoin core development team has responded very strongly, but because it is a loose organization, it has not received enough attention. As a result, to this day, China's Bitcoin core circle has not even understood the meaning of what is happening and is still intoxicated by the illusion of power over computing power.

Let me start from the beginning.

Since 2013, Bitcoin has developed rapidly in China. China once controlled 95% of the transaction volume and more than 50% of the computing power. The core developers' voice has become increasingly weak. The problem is that there are almost no Chinese core developers in the field of Bitcoin. Another background is that the founder of Bitcoin, Satoshi Nakamoto, has a relatively mysterious background. But if the CIA cannot find this person, I think it is doubtful.

In order to counterbalance the rise of the Chinese market, many new virtual currencies later changed their algorithms. Bitcoin is also constantly using technological improvements to weaken China's influence. This is the main reason why there are so many huge internal disputes in the industry regarding forks.

Many people in the industry believe that forks are determined by the nature of decentralization itself. This idea seems very naive to me. Let me give you a very simple example. If the main computing power is in the hands of core developers, would the issue of forks result in the current situation?

The purpose of the core developers is to make you reject the new plan and force you to fork, but many investors believe that forking is a proof of China's computing power.

Let me give you another example. In order to get rid of the suppression of the US dollar, China moved the International Monetary Fund to develop the Special Drawing Rights (SDR), and finally included the RMB in the basket of the SDR. But what changed? Before the RMB joined, the US accounted for 41.9% of the SDR. After the RMB joined, the US share only dropped by 0.17% to 41.73%, with almost no impact, and it still has a veto. Where did China get the 10% share? It was squeezed out of the euro, pound and yen. You can't imagine the control of the United States in the financial field.

Culture and strategic intentions determine that there is a natural and irreconcilable contradiction between core developers and China's computing power. However, when it comes to controlling decisive resources, intangible things are actually more powerful than tangible things.

The issue of forking will be discussed later.

At the beginning of this year, the People's Bank of China entered several major domestic Bitcoin trading platforms. According to the progress, the regulatory authorities have actually formed a certain regulatory plan for Bitcoin trading, gradually regulating exchanges, drawing red lines, and improving investor suitability management. Exchanges will still be retained. But just at this time, that is, in April this year, the Bitcoin ransomware virus "Eternal Blue" broke out.

As we all know, the Chinese government is most afraid of this. The fermentation of the entire ransomware virus has directly affected the regulatory authorities' policy attitude towards Bitcoin. If you pay close attention to this ransomware virus, it has a lot to do with the US CIA, because the vulnerability that was attacked is the backdoor that Microsoft left for the CIA.

Interestingly, after the ransomware successfully prevented the Chinese government from introducing a policy to legalize Bitcoin exchanges, Japan introduced a bill in April to recognize Bitcoin as a legal means of payment, which was not affected at all by the continued fermentation of the ransomware.

On September 4, China officially issued a document banning ICOs. Just a few hours before the regulatory document was released, Japan's Nikkei Asian Review reported that China, the world's number one oil importer, is preparing to issue crude oil futures contracts denominated in RMB and convertible into gold. The contract is expected to become the most important oil benchmark and allow exporters to bypass the US dollar-denominated benchmark and trade in RMB.

The market was in a state of excitement, believing that this was equivalent to linking the RMB with gold, and that the credit of the RMB would be further enhanced. However, what people do not know is that China's gold trading market has long had an international board, and foreign institutions can participate in gold trading denominated in RMB, and can make deliveries. If crude oil futures rely on the factor of converting into gold to attract international investors, it would be better not to do it. Instead, it seems a bit like trying to cover up one's own faults, and it is obvious that there is a lack of confidence in RMB-denominated crude oil futures.

Some Japanese media are very bad, they know what the Chinese people want and like. And what Japan wants to see most is the confrontation between China and the United States.

On September 15, China officially requested the closure of exchanges, and at the same time, the Japanese Ministry of Finance and the Financial Services Agency (FSA) officially issued the first Bitcoin exchange license. You read that right, it was such a coincidence.

On September 18, I wrote a special analysis titled "China's Bitcoin Exchanges Are Banned, Have the Japanese Achieved Their Goal?" The game between countries over Bitcoin has officially entered the stage of open and covert fighting. On the issue of Bitcoin, Japan and the United States also have their own ulterior motives.

Of course, it is unlikely to completely exclude China from the Bitcoin market. Chinese investors can still invest in real estate and other items overseas despite being subject to capital controls for many years, not to mention online investment products such as Bitcoin.

Recently, China's Bitcoin OTC market has developed rapidly, and trading platforms are also going global. If this continues, even if these Chinese platforms leave their homeland and move overseas, they can still compete well in the international market. Moreover, after Chinese exchanges go global, they will still support China's computing power.

However, what is even more coincidental is that on the night of October 31, when the two major domestic exchanges, Huobi and Bihang, stopped trading, the world's largest futures exchange, the Chicago Mercantile Exchange (CME), announced that it plans to launch Bitcoin futures in the fourth quarter and is currently awaiting regulatory review. You can think this is all coincidence.

The price of Bitcoin then broke through $6,400, and today it has broken through $7,000, setting a new historical high.

If you put the events of the past two years on a timeline, you will clearly find that whenever China wants to legalize Bitcoin transactions, there will be news about money laundering, hacker intrusions, and being exploited by illegal elements. But when China introduces regulatory policies and more stringently regulates Bitcoin, the Japanese and American markets will release good news in the same period. This is a very interesting discovery.

If a large number of capital flows in the future are dominated by Bitcoin, then the purpose of doing so is very simple. The United States is accustomed to using the circulation cycle of the US dollar to fleece the world. What the United States wants to control is not the specific computing power, nor the exchange and development team, but the pricing power of Bitcoin. Controlling the pricing power is equivalent to holding the global computing power, exchanges, and developers, because these roles essentially follow the price.

If the Chicago Mercantile Exchange successfully launches Bitcoin futures in the fourth quarter, it is no exaggeration to say that neither China's over-the-counter trading nor the exchanges in Japan and South Korea may have much say in pricing. Futures are a very special product, a transaction of future prices. The pricing power of many global commodities is firmly in the hands of the Chicago and New York commodity trading markets.

At this point, if you are a smart investor, you may have already sensed something.

Yes, in fact, the competition and game issues in the Bitcoin industry are no longer simply a market issue. Rather, countries like the United States and Japan, or consortiums (these countries are consortiums themselves), have begun to try their best to use and control this tool.

The goal is to weaken the weight of the Chinese market in terms of overall computing power, but the method is very clever. As for killing the Chinese trading market with the help of Chinese regulators, it may not be the goal, but the real goal is to make the Chinese market lose trust and dominance, so that it will be dependent on the international market and become a real shadow market in the future (does it seem a bit familiar?).

Although China's over-the-counter market has a large trading volume, all over-the-counter markets will eventually require pricing from the on-site market and will need to go to the U.S. market for hedging. Once CME Bitcoin futures are listed, it will become a hedging and trading channel for Bitcoin dealers around the world. This is equivalent to venture capitalists having an IPO exit mechanism, which will stimulate further heat in the terminal market.

China's bargaining chips in the Bitcoin market are currently only computing power. It no longer has any advantages in terms of policy and exchanges. Regarding the computing power issue, it is necessary to study the forked coin BCC on August 1 and the upcoming major fork. Chinese miners have fallen into a trap designed by others, but they don't know it yet and think they have a bright future and are sure to win.

Chinese miners need to open their eyes.

Text/Xiao Lei

PS:

The Bitcoin market experienced a fork on August 1 under the dominance of Chinese computing power, and will see another fork at the end of this month. The last fork gave birth to BCC and made many stakeholders famous. It was considered an effective action by Chinese computing power against Bitcoin core developers. But in my opinion, this is an obvious trap.

Regarding the Chicago Mercantile Exchange's preparation to list Bitcoin futures, everyone is concerned about the impact on prices, but its real impact is that once CME Bitcoin futures are listed, it may end the Bitcoin fork dispute . For a detailed analysis, please visit "Xiao Lei's Private Investment Club" to listen to "The Ultimate Analysis of Bitcoin Forks, Chinese Miners Need to Keep Their Eyes Open".