Bitcoin's comeback is unlike any other

Bitcoin is crazy again! It has returned with a ferocious price surge. Since the transaction price of Bitcoin broke through 3,000 yuan on May 25, its price once soared to 3,307 yuan on May 27, a 24-hour increase of 9.2%. Since then, it has continued to rise, reaching a peak of 3,988 yuan on May 30, almost approaching the 4,000 yuan mark, and also setting a new high since July 2014.

The surge has returned, once again pushing Bitcoin to the forefront. As a person who studies finance, I have recently received many calls from the media to interview why Bitcoin has made a comeback, why it has entered the field of investment speculators, and its future growth trend.

I have no say in the micro-level investment speculation and market analysis and forecast of Bitcoin, especially whether the price will continue to rise or fall, the current market risk, whether to dare to invest, etc. However, I still dare to say a few words about the macro trend factors that affect the development of Bitcoin. As a researcher of finance, especially Internet new finance based on network technology, Bitcoin and the blockchain technology behind it are one of the key areas of research.

What makes Bitcoin's comeback different from previous ones is that the macro background has undergone tremendous or fundamental changes. The main manifestations are in two aspects. First, Bitcoin has already had a social market consensus on industry development prospects and strong new technology support. This is the new financial industry, which is called Internet finance in China and financial technology in Europe and the United States. It has emerged vigorously and has become the general trend of the development of the financial industry that revolutionizes traditional finance. In technology finance, digital currency has strongly entered the field of vision of practitioners, and JPMorgan Chase, Goldman Sachs and Citigroup are all investing heavily in its development. As a new trading medium supported by the new economy such as the Internet, big data, and cloud computing, it is highly favored by various investment banks and investment giants. Digital currency has become a future discovery trend and an irresistible future trend to replace traditional sovereign currencies.

The foundation of digital currency depends on blockchain technology, and Bitcoin is supported by blockchain technology. This leads to the conclusion that Bitcoin is the ancestor of digital currency. This is the fundamental reason for the great vitality of Bitcoin.

This is the case in terms of technological innovation and development. In reality, citizens have had enough of being exploited by sovereign currencies. Inflation is like a bloodless devil that kills people without leaving any trace, causing citizens to suffer. People are disgusted with the sovereign currency playing with money, arbitrarily releasing money, and creating inflation to secretly deprive people of their wealth.

The above are the micro-level reasons why Bitcoin is making a comeback and is different from previous times. From a macro perspective, Bitcoin is also completely different from the past.

In 2013, the unit price once soared to 8,000 yuan, but at the end of the year, the price was almost halved because the People's Bank of China and five other ministries and commissions issued the "Notice on Preventing Bitcoin Risks". Many other countries in the world have also banned Bitcoin on a large scale, and its macroeconomic environment for survival is very poor. At the beginning of this year, Zhou Xiaochuan, governor of the People's Bank of China, personally attended the seminar on the development trend of electronic currency. Although he revealed in the subsequent conversation that he did not fully understand digital currency, he publicly supported the research on digital currency and Bitcoin's underlying technology blockchain at the seminar. It is completely different from the ban in 2013.

Currently, the acceptance of Bitcoin is increasing worldwide. The Commodity Futures Trading Commission (CFTC) of the United States has identified Bitcoin as a commodity. Now more than 20 states in the United States have issued licenses to Bitcoin trading platforms, which means that they recognize the legitimacy of Bitcoin as a commodity and financial settlement, and also recognize the legitimacy of trading platforms. Japan proposed to issue Bitcoin operating regulations. In March this year, Luxembourg, a member state of the European Union, issued a trading license to a Bitcoin trading platform.

Therefore, from the perspective of the macro and micro environment, digital currency will be able to develop greatly, and it is also the trend of future currency settlement methods, and no one can stop it. As the ancestor of digital currency, Bitcoin will not be bad in any case. Bitcoin's comeback is indeed due to speculation, but it is more important to see that it is actually determined by the deep-seated reasons of the macro and micro trends.