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 Source: Daily Economic News (nbdnews) Cai Ding, the views expressed in this article do not constitute investment advice. On the morning of June 22, Beijing time, Bitcoin, the world’s largest cryptocurrency by market capitalization, rose above $10,000 for the first time since March 2018. According to Coindesk data, as of noon today, Bitcoin has risen to $10,786.56, a cumulative increase of more than 240% from the low ($3,128) in December last year.  Image source: Coindesk Why did Bitcoin, which was “cool” at the beginning of the year, “take off” again? Where is the momentum for this round of rising prices? The reporter combed through the opinions of analysts and found that there are mainly the following reasons. 01 Facebook launches cryptocurrency According to Xinhua News Agency citing foreign media reports, analysts believe that this round of Bitcoin’s rise is firstly due to the good news about well-known companies’ participation in the cryptocurrency market, which has increased market enthusiasm and enhanced investors’ confidence in cryptocurrency. On Tuesday (June 18), Facebook released a white paper on its cryptocurrency project called "Libra", which attracted widespread attention around the world. Facebook has more than 2.6 billion active users worldwide. This project association is composed of 28 giants from different fields:
 It is reported that this cryptocurrency will be a secure payment system based on blockchain and supported by hard assets, designed for ordinary users. This is one of the boldest attempts yet to introduce digital currency into mainstream society. Facebook appears to be launching Libra in part to allay potential concerns from regulators at a time when its practices around user privacy continue to come under scrutiny. Facebook said it will also set up a company called Calibra, which will be governed with the help of external partners to ensure "social and financial data are separated." In addition, Calibra will provide an encrypted wallet that will allow users to use Libra for online payments and transfers. If companies and users accept it, Libra could become a more convenient way to pay online. Facebook is likely planning to sell products on Instagram and WhatsApp, but other sites may also use the cryptocurrency for e-commerce.  Screenshot of the Guardian report Crystal Keck, chief commercial officer of blockchain company Bolt, believes that Bitcoin broke through $9,000 stimulated by this news. Ren Steinberg, CEO and co-founder of Arca Asset Management in the United States, said that when well-known large companies participate in the cryptocurrency market, cryptocurrency will integrate into the trend of the times in a unique way. But industry insiders are not blindly singing praises for Facebook's Libra. Bank of England Governor Mark Carney showed caution in an important speech on Thursday. Carney said this could significantly reduce costs and increase financial inclusion, but would require regulation. Carney pledged to ensure regulation is prepared in advance to guard against risks such as data privacy and money laundering. According to China Securities Network, the final anti-money laundering and terrorist financing regulatory guidelines released today by the Financial Action Task Force (FATF), an international intergovernmental cooperation agency, clearly require that virtual asset service providers (VASPs), including cryptocurrency exchanges, must share customer information about transferring funds with the government. The reporter noted that in addition to e-commerce, Libra can also be used as a means of storing value and remittance without paying high fees, which is especially useful for people in developing countries that lack banking infrastructure. So if you want to send money to another country, using Libra may be cheaper than existing remittance methods. However, what does Facebook’s Libra have to do with Bitcoin?
02 Bitcoin’s safe-haven properties attract attention In addition to Facebook's announcement of plans to launch Libra, judging from the news, many people believe that the rise in Bitcoin is also related to the recent surge in international gold prices and the intensification of trade tensions.  Gold price trend chart over the past month (Photo source: Yingwei Finance)  Bitcoin price trend chart over the past month (Image source: Yingwei Finance) Coindesk data shows that since the beginning of May, Bitcoin has performed more eye-catchingly in an environment of sharp fluctuations in market confidence. The price has successively exceeded the US$6,000, US$7,000, US$8,000, and US$9,000 mark. Its potential as a safe-haven asset has once again attracted market attention. In addition, Xinhua News Agency pointed out that this round of Bitcoin’s rising market has also shown more resilience than before. Binance, a well-known cryptocurrency exchange, recently reported that more than 7,000 Bitcoins were stolen, but the news did not significantly weaken the price increase of Bitcoin. Relevant professional institutions said that the market’s lack of reaction to negative news may be a key sign that the “Bitcoin Winter” is over. Steinberg believes that recent international trade tensions have contributed to Bitcoin’s rise. McGonigal said money is flowing into Bitcoin as investors look for some kind of safe haven or hedging tool. Anthony Pompliano, founding partner of Morgan Creek Digital in the United States, believes that Bitcoin serves as a hedge against instability in global markets, which is the core reason for institutional investors to hold cryptocurrencies. 03 “Mining” rewards will be halved next year. Or boost Bitcoin’s rise In addition, according to AICoin data, the total market value of global cryptocurrency is US$315.318 billion. Bitcoin ranks first in the cryptocurrency market, with a market capitalization of approximately US$178.9 billion and a current market capitalization share of 56.73%. ； Ethereum ranks second with a market capitalization of US$31.4 billion and a market capitalization share of 9.97% ； Ripple ranks third, with a total market value of US$18.9 billion and a market value share of 5.98%. Bitcoin’s strong rebound has also been a catalyst for a large inflow of new funds. George McDonough, CEO of KR1, said: “It is obvious that during the 54-week Bitcoin bear market, funds did not leave, but were just waiting to return to the market. ”Paul Gordon, director of CoinScrum, said, “Bitcoin may continue to rise, and our current forecast is $11,800. ” Marty Greenspan, senior market analyst at eToro, believes that the current rebound in Bitcoin is not surprising: “Bitcoin’s surge in 2017 was largely driven by other cryptocurrencies, but this time Bitcoin’s rebound will drive the rise of other cryptocurrencies. ”In addition, when Fidelity and Bakkt open their doors, institutions will have more opportunities to enter - until now, the regulated futures market has still been a platform where a few professional institutions can obtain investment.  Screenshot of CCN report It is worth noting that despite Bitcoin’s recent outstanding performance, investors’ views on its future market trend are still divided. According to Xinhua News Agency, Joshua Frank, co-founder of the digital currency analysis platform "TheTIE", recently stated that the market's 100-day average confidence index for Bitcoin has remained positive for 120 days since it turned positive in mid-February this year. Discussions about Bitcoin on social networks have also become more enthusiastic. If this confidence and popularity can be maintained, Bitcoin will continue to appreciate. Coindesk also pointed out that since the "mining" reward will be halved at some point in May 2020, Bitcoin may continue to rise sharply. It is reported that the process aimed at curbing inflation by introducing rewards for "mining" on the Bitcoin blockchain is repeated every four years. Some observers predict that if Facebook's cryptocurrency Libra increases Bitcoin's appeal and usage, the upcoming halving of "mining" rewards could create an even greater supply shortage. Lars Seil Christensen, chairman of the American blockchain network company Concordium, believes that the Bitcoin market is highly volatile and the transaction volume is small, and its price can be pushed up or down by thousands of dollars without much effort. Complete text. Thanks for reading, thanks for clicking "Looking"” |
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