Behind the rapid growth of Bitcoin is the bursting of the "bubble"

At the end of 2016, the international market once again saw a surge in bitcoin trading. After a few years of silence, bitcoin, which was once priced at 1 yuan per coin, once reached 9,000 yuan. What a terrible price! A college student once asked on Zhihu, "I have a few thousand yuan of spare money and want to invest. Should I buy stocks or other financial products?" Someone replied below: "Buy bitcoin!" This answer was dug up by a netizen a month ago and was regarded as the most expensive answer. It is conceivable that if this person had bought bitcoin at the time, he would have become a millionaire today. Of course, there are not so many "ifs" and "if I had known" in the world.

Since last year, Bitcoin has quickly become the darling of high-frequency traders operating in China and other parts of the world, for the simple reason that there is no handling fee for buying or selling. Unlike stocks and futures, Bitcoin trading is free in the country and there is no third-party commission. However, on January 22, the three largest Bitcoin trading sites in China (BTC China, Huobi and OkCoin) announced that they will charge Bitcoin traders a fixed fee of 0.2% per transaction in the future, noting that this fee will "further curb market manipulation and excessive volatility." Since then, Bitcoin regulation has entered a more stringent era.

One of the reasons why China has dominated Bitcoin trading volume in recent years, in addition to the capital controls on digital currency trading in the United States, is that it is exempt from transaction fees, which has greatly increased the demand for Chinese Bitcoin exchanges. However, when the price of Bitcoin soared to near its historical high, Bitcoin trading attracted the attention of Chinese regulators because local Chinese investors believed that Bitcoin was more "safe" than the continuously depreciating RMB. The People's Bank of China also conducted on-site inspections of Bitcoin China, Huobi and OkCoin to investigate a series of possible violations in an effort to stop capital outflows and ease pressure on the RMB. The major Bitcoin exchanges did not receive direct instructions from the People's Bank of China, but all introduced Bitcoin transaction fees to cool the market.

It is conceivable that with strict supervision, Bitcoin is following in the footsteps of real estate and becoming the next bubble economy. The total number of Bitcoins in the world is 21 million, and more than half of them have been mined now. The remaining ones will definitely be snatched up in a crazy state. Many investors are blind, just like buying houses in the early days, buying several houses at a time. However, with the country's economic regulation, Bitcoin will gradually enter a more rational stage. The final result of rapid growth is that the bubble of the Bitcoin market will burst!