Recently , Bitcoin has become a hot topic among investors again, and the reason is simple: the price has risen. Since the transaction price of Bitcoin broke through 3,000 yuan on May 25 , its price soared to 3,307 yuan on May 27 , with a 24- hour increase of 9.2% . Since then, it has continued to rise, reaching a peak of 3,988 yuan on May 30 , approaching the 4,000 yuan mark, and also setting a new high since July 2014 . ◎ Li Lei, intern reporter of Meike Bitcoin has recently become a hot topic among investors again, and the reason is simple: the price has risen, and the rise is astonishing. Financial management expert Buerniu saw on Huobi.com, a domestic bitcoin trading platform, that since the bitcoin transaction price 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 . In the following days, although the transaction price of Bitcoin has dropped, it is still hovering between 3,700 and 3,800 yuan, and the market seems to be continuing. However, from the perspective of overall transaction volume, the volume in recent days has not increased significantly compared with the previous period. The flowers are so numerous that they dazzle the eyes. In this situation, can Bitcoin be bought? What are the risks that should be prevented? The following financial management company will explain them to you one by one. ● Why has the recent surge This round of surge has once again pushed Bitcoin, which has long been out of sight, to the forefront. Many investors may have heard of Bitcoin, but they don’t know much about what it is and why it can be sold at nearly 4,000 yuan per unit. Financial Management Niu Niu thinks it is necessary to lay the groundwork for everyone here. The so-called Bitcoin is actually one of many digital currencies. Its concept was first proposed by the developer " Satoshi Nakamoto " in 2009. The digital currency exchange Coinbase and the investment management company ARK Invest recently jointly released a white paper, defining Bitcoin as " a new type of asset " . Compared with legal tender, Bitcoin does not have a centralized issuer, but is generated by the calculation of network nodes, which is the so-called " decentralization " . Investors can buy and sell Bitcoin on any computer connected to the Internet. No matter where they are, anyone can mine, buy, sell or receive Bitcoin, and outsiders cannot identify user identity information during the transaction. Because of this, ordinary investors can generally only obtain Bitcoin through two paths. The first is " mining " , which is to use computers to solve a complex mathematical problem to ensure the consistency of the distributed accounting system of the Bitcoin network and obtain bonuses from the Bitcoin network. This also means that the total output of Bitcoin has been increasing, but its total amount will be permanently limited to 21 million, which is a design made by developers to ensure its scarcity. The other is to buy and trade on a professional Bitcoin trading platform. The Bitcoin market price mentioned above is the price generated during the transaction. Of course, whether it is recharging or withdrawing, investors still need to exchange with legal currency. So what factors determine the price of Bitcoin? Fundamentally speaking, the price is of course determined by supply and demand. As mentioned earlier, the total amount of Bitcoin is limited. The specific method is that its reward will be reduced by half every four years. The next halving will be in July this year . According to the situation in previous years, whenever the production of Bitcoin changes, its price fluctuates greatly. Huobi co-founder Du Jun told buerniu5188 (WeChat ID: buerniu5188 ) that amid the “ asset allocation shortage , ” many investors don’t have any good investment targets. At this time, those who originally held Bitcoin just happened to catch the information of halving production and rising prices. “ This is a big incentive . ” Onchain CEO Da Hongfei , known as the " first Chinese blockchain entrepreneur " , pointed out to Finance Buerniu that the halving of production is not the main reason for the surge in Bitcoin prices, " because a large part of the Bitcoin currently traded in the market is not newly generated, but held in the past. Although production has been halved, market supply will only drop slightly, so it cannot be said that the supply and demand relationship has changed. There are many reasons for price changes in the short term, such as people's enthusiasm for buying and selling due to good news, and it is not ruled out that someone is manipulating the price, so it is difficult to attribute it to a single reason. The unavoidable “ black swan ” According to data provided by Huobi.com, there are about 5 million Bitcoin trading users in the world, and about 2 million Bitcoin trading users in China . It is no exaggeration to say that China is one of the most active Bitcoin countries in the world. The trading platform once painted a profile of its users: a total of about 1.5 million investment users, mainly males aged 30 to 39. The largest number of users are from the IT industry, accounting for 35.45% ; the rest are mainly from education (including students), government public services and finance. Nearly 80% of Bitcoin investors have a high school degree or above. In other words, this is a relatively high-end group of players. IT man Zhu Jiang (pseudonym) is a typical example. He turned to investing in Bitcoin because of the setback in the stock market at the beginning of the year. In May , he made 20% in one day . Zhu Jiang's good impression of Bitcoin is beyond words: " Bitcoin trading hours are 24×7×365 , there is no market closure, and domestic trading platforms do not charge handling fees. The operation is much smoother than the T+1 system and price limit restrictions of the stock market. " However, he obviously has his own concerns: " From the perspective of price fluctuations, there is no pattern to follow. When there is good news, the price goes up wildly, and when the enthusiasm dies down, it falls. And I often see news saying that Bitcoin has been banned somewhere. How can I not worry? " Zhu Jiang is right. In fact, due to the unlimited fluctuation range, the price of Bitcoin is prone to fluctuate. For example, in 2013 , the unit price once soared to 8,000 yuan, but at the end of the year, it was almost halved because the central bank and five other ministries issued the "Notice on Preventing Bitcoin Risks". In 2015 , the overall transaction price of Bitcoin rose by 35% , and so far in 2016 , this figure is 34% . An industry insider admitted to Buerniu (WeChat ID: buerniu5188 ) that the creators of Bitcoin used a lot of logic based on the principles of gold, so " I never thought that Bitcoin would have very strong currency attributes or become legal tender one day, but its reserve currency attribute is not a problem . " He also mentioned that it is precisely because of the " almost no correlation " with other currencies and the huge price fluctuations that Bitcoin is also used as a tool for speculation by many people, " to hype it up in the short term, make a profit and leave . " In addition, the uncertainty in macro policies and application scenarios makes it possible for " black swans " to fly into the Bitcoin market at any time, which is also a major impact that investors have to pay attention to. The above-mentioned industry insider pointed out that Bitcoin is still a relatively fragile target: " First, it is not protected by national policies and regulations; second, if there is any disturbance, Bitcoin may become an abandoned investment target. There are still too many uncertainties in this trading market. " However, as things stand, Bitcoin is gaining acceptance around the world. Late last year, the U.S. Commodity Futures Trading Commission ( CFTC ) identified Bitcoin as a commodity. Now more than 20 U.S. states have issued licenses to Bitcoin trading platforms, which means that they recognize the legitimacy of Bitcoin as a commodity and financial settlement, as well as the legitimacy of trading platforms. Soon after, Japan proposed issuing operating regulations for Bitcoin. In March this year , Luxembourg, a member of the European Union, issued a trading license to a Bitcoin trading platform. In China, at the beginning of this year, the central bank governor Zhou Xiaochuan talked about digital currency and Bitcoin's underlying technology blockchain in public, which also greatly increased the attention paid to Bitcoin. Song Yixin, partner of Tianming Law Firm, told Buerniu (WeChat ID: buerniu5188 ) that Bitcoin investment " is not essentially a zero-sum game, nor is it illegal fundraising, but an investment behavior. From this perspective, it is legally risk-free. However, although there is no legal risk, investment risk is inevitable, which mainly manifests itself in two aspects. First, technological innovation has made mining easier, and second, it may touch the policy bottom line of the world's central bank system represented by the current paper currency . " ● Avoid these pitfalls when investing Given that the price of Bitcoin has experienced a sharp rise at the end of May and is currently at its highest level in nearly two years, is it still possible to invest now? Many professionals interviewed by Buerniu (WeChat ID: buerniu5188 ) also have different opinions and cannot come to a unified conclusion. After all, from the current development, with the support of the halving of production in July , the trading price of Bitcoin is indeed high, but no one can tell when this wave of market will come to an abrupt end. As a senior player told Financial No. 2: Whenever investing in Bitcoin, it is extremely important to set the take-profit and stop-loss lines. “ A major advantage of Bitcoin trading is that investors can set the buying and selling prices on the platform in advance, and as long as the price reaches this threshold, the operation will be automatic, without the need to fight to the end . ” So, what are the risks that you need to pay special attention to when investing in Bitcoin? Da Hongfei told Buerniu.com that the biggest risk for Bitcoin investors right now is whether the exchange is reliable, which is the so-called " counterparty risk " , rather than the risk of Bitcoin's own rise and fall. The former is far greater than the latter. Du Jun also agreed with this, " Because there are currently no state-owned enterprises or listed companies on the domestic trading platforms, there is no supervision or licenses, and it cannot be simply judged by scale, history, etc., so it is still relatively difficult . " However, there is also an important indicator that can be used as a reference, that is, whether the platform has received investment, and it is best if it is an investment from a well-known venture capital institution, because " ordinary consumers cannot see what the exchange does with investors' money due to information opacity, but venture capitalists know it well, and it will be relatively safer from the perspective of asset health . " Secondly, investors should also pay attention to where their bitcoins are stored. For example, some investors have trading platforms, which may lead to the risk of bankruptcy or absconding. If the service provider who puts the bitcoins into the wallet is proposed, whether the service provider itself is reliable is also a question. According to the suggestions of industry insiders, we have compiled three tips for storing Bitcoin: 1. If the amount used daily is less than 10 coins, you can store it in a computer or mobile app ; 2. If you hold dozens or hundreds of Bitcoins, you can choose some online wallets, which can also be used as daily wallets; 3. If you hold thousands or even tens of thousands of Bitcoins, you should store them separately and in isolation. Use an offline computer to generate a key, print it out and store it in a high-security place such as a bank, and destroy the existing key. At the same time, multiple copies of the key need to be stored in isolation, and even the key needs to be encrypted. Third, this is something that I personally learned from my own experience: Bitcoin novices are prone to encountering some " stock recommenders " who predict and recommend market trends , and who use free predictions to deceive investors and then provide paid services. What should I do if I encounter this? One word: run ! | 
