Did you miss this “Internet celebrity currency” in 2016?

【Abstract】From the Bitcoin incident, we can see that when we invest, we should not be dazzled by the huge profits, but should also see the hidden risks and safety behind it. Speculators who do not know the risks can only see the economic bubble after the impact of cruel reality and the dream of getting rich. The big picture analysis allows investors to maintain a clear understanding of the overall market, only in this way can they identify risks and opportunities in time. With the changes in market conditions, investors should reasonably diversify their investments and optimize their investment portfolios according to their actual conditions, so as to form an investment method that suits them.

Author: How many

The offshore RMB surged last night, some were happy while others were sad. Galaxy Ventures COO sexually harassed a female passenger and Kongkonghu CEO was exposed to be squeezed dry and manipulated by his godmother Wang Yami, which made everyone smell the scent of gossip in the financial world.

However, there is another big market that many people have overlooked - the price of Bitcoin has broken through a new high, rising above the $1,140 window, and today it has even broken through the historical highest price of 8,762 yuan per coin. Many people will definitely wonder what Bitcoin is? Why has it risen so much? Let the editor who is equally curious sort it out for you.

The concept of Bitcoin was first proposed by Satoshi Nakamoto in 2009. It is a P2P digital currency. The open source software designed and released according to Satoshi Nakamoto's ideas and the P2P network built on it. Peer-to-peer transmission means a decentralized virtual payment system. Unlike most currencies, Bitcoin does not rely on a specific monetary institution to issue it. It is generated through a large amount of calculation based on a specific algorithm. The Bitcoin economy uses a distributed database composed of many nodes in the entire P2P network to confirm and record all transactions, and uses cryptographic design to ensure the security of each link in the currency circulation.

Bitcoin can be used to cash out and can be exchanged for the currencies of most countries. Users can use Bitcoin to buy some virtual items, such as clothes, hats, equipment, etc. in online games. As long as someone accepts it, they can also use Bitcoin to buy items in real life. Because it is not controlled by the central bank or any financial company, and outsiders cannot identify the user's identity information during the transaction process. Economists have polarized attitudes towards it. One side believes that it will lead to deflation and harm the overall economy, while the other side believes that escaping government intervention is a sign of social progress.

On January 5, 2017, according to data from a domestic platform, as of 8:45 am today, the highest price reached 8,650 yuan, with a price increase of more than 260% in one year, constantly setting new historical highs. Many Bitcoin investors are amazed at the craze for Bitcoin and are also analyzing the reasons. Data from the latest quarter show that three platforms from China, Bitcoin China, Huobi.com and OKCoin, account for more than 98% of the total global transaction volume, which clearly shows that our Chinese buyers play a pivotal role in this Bitcoin market. In addition, some media have also revealed that a large number of transactions on Chinese Bitcoin exchanges - many of which are conducted through automatic software - indicate that most price fluctuations are the result of speculators' bets.

As for the behavior of Chinese buyers, some analysts said that after Brexit and Trump's coming to power, the United States and Europe have shown a certain isolationist tendency in politics, which has brought new advantages to Bitcoin. People try to circumvent capital controls by buying Bitcoin. The recent continuous update of foreign exchange policies has also increased the demand of Chinese investors. That is why there is the current excitement of Bitcoin speculation.

Many people regard Bitcoin as a new "belief" and begin to buy Bitcoin enthusiastically. Some investors can't help but ask, will Bitcoin replace gold as the largest safe-haven asset?

In fact, when we see the crazy rise of Bitcoin, we should also pay attention to its sluggish state. From December 2013 to now, Bitcoin has been in a relatively sluggish state for three years, and the trading price even hit the bottom below $200. The volatility of Bitcoin is very drastic. This means that there are huge risks behind investing in Bitcoin.

(Market price increase of Bitcoin and gold from 2012 to 2016)

At the same time, professional trader Ian Bezek believes that Bitcoin is more accepted in some countries with severe capital controls, such as Argentina, where it is difficult to transfer assets abroad. At the same time, gold is a traditional wealth inheritance asset that is easy to carry and store, and gold has a higher degree of recognition. Although Bitcoin has its advantages, people still do not trust it very much. As a wealth storage tool, Bitcoin faces many risks, such as government supervision, problems with Bitcoin code, and competition from other electronic currencies, which can all cause its value to become zero.

Therefore, gold is still a place for everyone to preserve their wealth. The editor believes that Bitcoin is affected by many factors, the volatility is too large, the risk is too high, and the value of Bitcoin is driven by expectations of its potential future use, which is difficult to quantify. At the same time, Bitcoin only exists on the Internet, which makes it convenient for criminals to transfer wealth, which is not acceptable to the law.