Bitcoin has always been the poster child for a roller coaster ride

According to data from relevant Bitcoin trading websites, Bitcoin has recently resumed its crazy rise, especially in late May , when the highest price was close to RMB 3,920 , a record high since July 2014. Although the price of Bitcoin has fallen back recently, it still remains above RMB 3,500 .

Regarding the recent rise in Bitcoin prices, Wacai Research Institute believes that this is related to the renewed expectation of the Fed's interest rate hike, which has led to a strengthening of the US dollar index and renewed pressure on the RMB exchange rate. The expectation of RMB depreciation has stimulated Chinese investors to actively seek new investment channels, and Bitcoin has become one of many targets. Although the Fed's interest rate hike last Friday has created new variables, the overall trend has not been reversed. At the same time, due to the Bitcoin algorithm setting that the output is halved every four years, and July this year happens to be the Bitcoin halving day, the supply has begun to shrink, and many developed countries such as Europe and the United States have successively allowed Bitcoin as a settlement currency, resulting in changes in the supply and demand relationship.

In addition to market transactions, Wacai Research Institute believes that the global recognition of the blockchain technology at the bottom of Bitcoin also has a lot to do with it. Blockchain technology has the advantages of decentralization, traceability, immutability, trustworthiness, and programmability. It can achieve stable and reliable transactions of Bitcoin without centralized third-party supervision, and has become the core of ensuring the safe operation of Bitcoin.

Does the rise of Bitcoin mean that the spring of Bitcoin investment has arrived? In this regard, the Wacai Research Institute recommends investors to be cautious. In fact, Bitcoin has been the spokesperson for the " roller coaster " since its birth . Bitcoin is a virtual currency generated by a unique algorithm, and the total number is limited to 21 million. Players can generate Bitcoin from the " mining pool " through a dedicated " mining machine " , or trade in the virtual space of the Internet. At the end of November 2013 , Bitcoin appreciated nearly 100 times to a historical high of nearly US$ 1,200 , thus attracting worldwide attention. However, in December 2013 , as the People's Bank of China positioned Bitcoin as a virtual commodity and could not be circulated as currency, the price of Bitcoin has since plummeted all the way to around 2,500 yuan, and many players have been deeply trapped. To this day, many investors who " entered the water " in 2013 have not yet been released.

Wacai Research Institute believes that this round of Bitcoin price increase is mainly due to the superposition of multiple favorable factors in recent times. In addition, as a virtual currency, the issuance of Bitcoin is not controlled by the central bank, and the regulatory authorities have not recognized it. At the same time, Bitcoin has a high risk of speculation and money laundering. Ordinary investors who blindly follow the trend are likely to suffer heavy losses.