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2021-01-04 02:01
Editor / China Business News
From $ 20,000 to $ 30,000, what forces are pushing Bitcoin to skyrocket after just half a month?
Author: 4. Alina Cho
[ 截至北京时间1月3日，一枚比特币的价格报32775.7美元，突破3万美元大关。 ]
[ GBTC的总持仓量不到半年的时间增长了58.3%，已经接近57万枚比特币。 ]
At 11:02 AM on January 3 Beijing time, the price of one bitcoin was reported as $ 32,775.7 US. From breaking the $ 20,000 mark to breaking the $ 30,000 mark, Bitcoin only took half a month. Why is there such a steep rise in crypto assets?
After analyzing the important time nodes of this round of the Bitcoin bull market, a China Business News reporter also found that two time nodes are worth paying attention to: First, in mid-October 2020, Bitcoin held firmly. at the $ 10,000 mark; Second, in mid-December 2020, Bitcoin broke the $ 20,000 mark, setting a new record. At the same time, Bitcoin broke $ 10,000 in early October, that is, after the first major moment in time, it can be seen that there are signs that institutions are starting to enter the market.
For example, on October 8, mobile payments giant Square suddenly announced a $ 50 million investment in Bitcoin; On October 13, asset management company Stone Ridge Holdings, which manages more than $ 10 billion in assets, revealed that the company bought more than 10,000. Bitcoin, with an approximate value of 114 million US dollars; On October 22, the world’s largest cross-border payment platform, PayPal, announced that it would allow users to buy, sell and hold cryptocurrencies on the platform; On October 27, Singapore’s largest commercial bank, DBS Bank announced that it will provide encrypted digital currency transactions.
“From $ 10,000 to $ 20,000, the main force behind the market rise is traditional institutional users. These traditional giants entered the cryptocurrency market and bought a large amount of Bitcoin, bringing unprecedented heat and optimism. to market, boosting Bitcoin The price of the cryptocurrency is rising. ” William, the principal investigator for OKEx Research, told CBN reporters. However, in the second stage, some interesting phenomena were discovered: when the price of Bitcoin exceeded the $ 20,000 mark, a large number of investors started investing in cryptocurrencies. The forex market once caused some cryptocurrency exchanges to experience stagnation or downtime, indicating that the main investing force in the market may undergo structural changes, and former institutional investors have turned to small and medium investors; on the other hand, market excitement has been affected. With a further increase, people are more optimistic about the future of Bitcoin and have a lower tolerance for risk (market research found that many people are able to borrow money and increase leverage to speculate in coins). Two factors work together to make the price of Bitcoin rise rapidly.
It is worth mentioning that there are currently some regulated fiat products tied to Bitcoin and Ethereum. It is understood that some Wall Street institutions that cannot directly invest in crypto assets due to compliance requirements have started to implement this type of trust. In this kind of trust, the Grayscale Trust has been the center of attention this year. For example, Grayscale Bitcoin Trust (GBTC) is Grayscale’s largest encrypted digital asset fiduciary product. GBTC funds are similar to ETFs (Exchange Traded Funds), but there is no redemption mechanism. There are also 6 transactions in the secondary market. During the monthly lockdown period, GBTC’s primary market subscription is only open to qualified investors. The third quarterly report shows that 80% of clients are institutional investors (mainly hedge funds), so it is a good indicator to watch the inflow of institutional funds. Total GBTC holdings have increased by 58.3% in less than half a year and have reached almost 570,000 Bitcoins, indicating that in the second half of this year, a large amount of institutional funds began to pour into Bitcoin.
However, traders generally believe that the Bitcoin bubble is already huge, entering blindly or even increasing leverage or the possibility of liquidation. “Here too cold water needs to be poured on some investors in today’s money circle: For institutional investors it’s profit that matters to them, not sentiments like ‘the Bitcoin faith’ or the ‘blockchain revolution’. On the vaccine list, After the epidemic gradually eases, with the gradual recovery of the economy, monetary policy will gradually shift from relaxed to moderately restrictive. At that time, institutional investors are likely to sell Bitcoin. Of course, Bitcoin will remain in general until then. The main upward trend, of course, as the price of Bitcoin becomes higher and higher, the market volatility will gradually increase. Investors are not recommended to increase excessive leverage, “he said William.
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