Still that crazy Bitcoin

Although it doubled again within a month, Bitcoin is still the crazy Bitcoin.

The price of Bitcoin has doubled in the past month, and even hit the $500 mark yesterday. The last time Bitcoin reached this price was in August last year. However, Bitcoin's "demonic nature" remains unchanged, and the speculative nature of the market is destined to be a highly volatile market. Yesterday, the price of Bitcoin fell off a cliff, and a large number of selling orders pushed its price down by 26% to $368. Data from the domestic trading platform Huobi.com showed that the price of Bitcoin fell from 3,300 yuan to 2,650 yuan, a drop of more than 15%.

"Before, seeing the continuous decline, few people discussed Bitcoin in the Bitcoin investment QQ group." Mr. Chen, a Bitcoin player, told reporters, "I am also a veteran player. I am used to the ups and downs. I am also full of hope for the future of Bitcoin. Since the stock market began to fluctuate violently in the middle of the year, many friends who played Bitcoin have begun to return to the Bitcoin market."

At this point, Mr. Chen also seems to have to "thank" Bitcoin: "From mid-June, the A-share market began to fall sharply, but at this time the price of Bitcoin saw a significant increase. This negative correlation performance allowed me to make up for some of my losses in stock trading, and I decided to continue investing in Bitcoin." Market data shows that from early June to mid-July, the price of Bitcoin rose from 1,400 yuan to nearly 2,000 yuan.

So, what caused the long-dormant Bitcoin to surge? Mr. Chen still believes that the current rise in Bitcoin is mainly driven by blockchain technology. As a derivative of blockchain technology, Bitcoin’s authenticity and transparency have attracted the attention of many investment banks and financial institutions.

Some analysts also believe that the tightening of capital controls may stimulate the rise in Bitcoin prices, and some people may use Bitcoin to circumvent capital controls. Huobi.com's trading data shows that the platform's transaction volume reached 2.1 billion yuan on the 4th alone. According to data released by Blockchain.info, a Bitcoin wallet provider that tracks Bitcoin data, Bitcoin transaction volume has tripled in the past two years, from an average of 50,000 per day to 140,000.

In fact, most people who remain in the Bitcoin circle are like Mr. Chen, who holds out hope while thinking of other solutions. "I hope the Bitcoin market can develop healthily, and the market will improve when the wind comes, but I am still a little worried. I don't know what the future of Bitcoin will be like. Price stability is the sign of Bitcoin's maturity."

In January 2009, Bitcoin was officially born. Whether the creation of Bitcoin is a great Internet financial experiment or a Ponzi scheme led by geeks, Bitcoin has become the world's most popular Internet virtual currency. Bitcoin was worthless at first, and experienced a more than 100-fold surge in 2013, but in 2014 it plummeted by more than 70%, which shows its violent volatility.

As we enter 2016, where will Bitcoin go? Another Bitcoin player, Mr. Xu, said that if Bitcoin always stays in the hype stage, the price often fluctuates violently, and does not really move towards the actual application field, one day people will lose confidence in Bitcoin, and Bitcoin may eventually fail. Investors should not chase the rise just because they see the money-making effect, but should truly understand digital currency and recognize its value, just like investing in stocks.