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2020, for some people, is a year of explosive wealth growth. For example, those who buy NIO, Tesla, Bilibili and Pinduoduo stocks. On January 6, 2021, someone made a statistics. This year, the annualized returns of Weilai Auto, Tesla, Bilibili, and Pinduoduo were 1291%, 745%, 392%, and 365% respectively. In other words, if you invest 100,000 in stocks at the beginning of 2020, you will earn 1.291 million by buying NIO, 745,000 by buying Tesla, 392,000 by buying Bilibili, and 365,000 by buying Pinduoduo. That's right, just make money while lying down. Relying on favorable policies, company strategies, blank markets, etc., these companies are like a fast-moving train, and you can catch this train with your vision. However, there is still a group of people who have made money, those who buy Bitcoin. On January 8, 2021, Bitcoin's closing price was $40,599.3, a record high. A year ago, on January 8, 2020, the closing price was only $8,059.6. In just one year, Bitcoin surged 404%. In other words, if you spent 100,000 yuan to buy Bitcoin a year ago, you would now earn 404,000 yuan. If we count forward 10 years, Bitcoin's skyrocketing will be tens of millions of times. People have experienced the sorrow of being a social animal and the pain of being a laborer. Who doesn’t want to get rich overnight? Seeing people around me making a lot of money by buying Bitcoins, more and more people are entering the market, and more and more people are tricking people into buying Bitcoins. Look, even the questions on Zhihu are somewhat provocative. Needless to say, this person most likely bought Bitcoin. And when the answer stands on the commanding heights and pokes the pain of reality, it seems that everyone who does not buy Bitcoin is a fool and deserves to suffer. There are even more people, so many people say that Bitcoin is a scam, but it has risen from 1 cent at the beginning of its birth to tens of dollars, hundreds of dollars, thousands of dollars, and all the way to 40,000 dollars today. The price of Bitcoin will definitely continue to rise. And if it can rise for the first time, it can rise for the second time. If you don’t buy it, what are you waiting for? But it only took two days. On January 11, 2021, Bitcoin plummeted by $6,000 in one day, a drop of more than 20% in 24 hours. In the entire encrypted digital currency market, as many as 200,000 people liquidated their positions, and 13.7 billion was lost, all of which were real money. And behind every plunge in Bitcoin, there is such a story of losing everything. This is not just a bunch of numbers. One month ago, there was the latest development in the incident of three members of a family jumping off the Xinghaiwan Bridge in Dalian on June 18. What happened is this. On June 18, 2020, a couple in Dalian lost all 20 million due to Bitcoin speculation. Among them were 4 million from his parents, 500,000 from his parents-in-law, as well as his and his wife’s savings and money borrowed from relatives. The couple who could not bear the shock killed their 3-year-old daughter and then took their daughter to the Xinghai Bay Bridge to commit suicide. Zheng Mouwei attempted suicide but was rescued. He was later charged with intentional homicide by the court. A few days ago, the British Financial Conduct Authority (FCA) even issued a warning: If consumers invest in such products, they should be prepared to lose all their money. Let’s put aside whether Bitcoin is a scam or not. Let’s first discuss what Bitcoin is and what its value is. This starts with the birth of Bitcoin. 01 In 2008, the global financial crisis broke out. On November 1, a person calling himself Satoshi Nakamoto released the Bitcoin white paper "Bitcoin: A Peer-to-Peer Electronic Cash System." In the book, he describes Bitcoin's raison d'être: a purely peer-to-peer electronic cash system that allows online payments to be sent directly from one party to another without going through a financial institution. Pay? Electronic cash? This is not the function of currency. Has Bitcoin, which was born with the expectation of “currency”, been used for transactions? Of course there are, but only a handful. Bitcoin, which has been around for 12 years, is simply negligible compared to the transaction volume of US Visa credit cards and MasterCard. You can hardly see the red dot. A large part of the only transaction volume comes from Bitcoin investment and transactions, rather than being used to pay for shopping. And the part used to pay for shopping is still darknet transactions that cannot be put on the table. Because compared to ordinary legal tender, Bitcoin cannot be regulated. Since its birth, its biggest highlight has been decentralization. What is decentralization? It means that there is no need for an institution like the central bank to keep accounts, no government guarantee, and direct peer-to-peer transactions. To the unscrupulous and speculative, this may seem like a good idea. But for ordinary people, this is almost a disaster. Because, Bitcoin is likely to be stolen. According to statistics, hackers stole $1.7 billion worth of cryptocurrency in 2018 alone.； In 2019, that number was $4 billion ； In 2020, such things have not decreased. Will money be stolen if it is stored in the bank? Of course it will, but the state and banks will help you recover it. But Bitcoin is originally unsupervised, so who can be responsible for your loss? Furthermore, as a currency used by people for daily transactions, the stability of value is really important. If it was worth 40,000 yesterday, it is only worth 30,000 today, and there is a risk of it falling to a few thousand tomorrow. Do you dare to spend it as money? This is not an alarmist statement. Look at the fluctuations of Bitcoin in recent years. The exchange rate fluctuations between it and the US dollar are like a roller coaster, but as a legal currency, the relationship between the euro and the US dollar is a smooth straight line. With such violent fluctuations in Bitcoin, how can people exchange their hard work for it, hold it with peace of mind, and use it to exchange for daily necessities? The violent fluctuations of Bitcoin determine that people are not willing to use it as currency, at least in the short term. 02 In fact, to a greater extent, it is not a question of whether people are willing to use it as currency, but a question of whether their country dares to allow it to be used as currency. Because of the sharp fluctuations in the exchange rate, it is simply a disaster for a country. How many people still remember the Asian financial crisis in 1997? How many people still remember that Thailand was once one of the "Four Asian Tigers"? In 1996, Thailand's per capita GDP exceeded US$3,000. The government quickly opened its doors and attracted a large amount of foreign investment. However, most of this money flowed into Thailand's stock market and real estate, which in turn pushed up housing prices and the stock market. So, seeing that money can be made here, more money comes in, and those who have no money simply look for bank loans to buy stocks and buy houses. The average loan interest rate of Thai banks was once as high as 17%, and few people were willing to use the money to engage in industry. In 1997, Thailand's economy seemed to be prosperous, but inside it was already fragile. As early as 5 years ago, the Thai baht had just been pegged to the US dollar, and a fixed exchange rate was implemented, that is, 1 US dollar was exchanged for 25 baht. But the reality is that the U.S. economy is developing strongly, while the Thai economy under the real estate bubble is in recession. Logically speaking, the real value of 1 US dollar is already much higher than 25 baht, and the Thai baht must depreciate. But for Thailand at that time, if the Thai baht was allowed to depreciate, a large amount of foreign capital would flee Thailand. On the other hand, when Thailand repays its foreign debt, it would have to pay back more money. No matter which thing happens, the Thai government cannot bear it and they can only grit their teeth and endure. All this was seen by the international speculator Soros. He bet that the Thai baht would depreciate, and he even carefully planned a war to promote the devaluation of the Thai baht. In March 1997, the Bank of Thailand announced that nine domestic finance companies and one housing loan company had problems with low asset quality and insufficient liquidity.； In April, the long-term lending ratings of Thailand's three major banks were downgraded from A2 to A3 by the international rating agency Moody's.； Soros had a premonition that the opportunity had come. In May, Soros began to borrow large amounts of Thai baht from banks and then sold it on the market. He did this three times in a row. Ordinary people who ate melons had no idea what was going on. They saw that the Thai baht was being sold in large quantities and was about to depreciate, so they followed suit and sold the Thai baht in their hands. Thailand's foreign exchange reserves were insufficient, so it began to seek help from neighboring countries. Malaysia, Singapore, Hong Kong, and the central bank began to use their own reserves of U.S. dollars to purchase Thai baht. It took a full 15 billion U.S. dollars before the Thai baht stopped falling. In this wave, Soros lost $300 million. But Soros learned through insiders at the Bank of Thailand that the Thai government's foreign exchange reserves were running low. In June, Soros led international speculators and launched another attack on the Thai baht, this time more violently. Thailand was simply unable to resist. On June 19, the Finance Minister announced his resignation. The next day, ordinary people went to the bank to withdraw their deposits, exchanged the money they took out for US dollars, and rushed to buy goods. In any case, they were worth more than the Thai baht in their hands. On July 2, the new finance minister was forced to announce that he would abandon the fixed exchange rate after taking office for only 12 days. The exchange rate between the Thai baht and the US dollar could float freely. In just a few days, the Thai baht devalued by 20%. By the end of the year, it devalued by 44%, and even devalued by 60% at one time. The Soros who are speculating only need to spend a few dollars to buy Thai baht and return it to the bank, and the rest is a net profit. In this attack, Soros alone made a full US$2 billion, and it was the Thai people who lost this wealth. Seeing that Soros has made money through this, more and more international financial speculators have followed suit and used similar techniques to sweep the currencies of various countries and regions, and one of their targets is the Hong Kong dollar in Hong Kong, China. Hong Kong, together with the mainland, began a battle to defend the Hong Kong dollar. From mid-July to August 1998, speculators attacked the Hong Kong dollar three times, and the Hong Kong government started a decisive battle with financial speculators. The Hong Kong government bought as many Hong Kong dollars as the speculators sold. The competition at this time was foreign exchange reserves. At that time, Hong Kong had foreign exchange reserves of US$82 billion, and the central government had foreign exchange reserves of US$128 billion. The total foreign exchange reserves were US$210 billion, ranking first in the world at that time. No matter how rich the international financial speculators are, they will not be so rich as to rival the country. This decisive battle ended with Hong Kong's overall victory. The Hong Kong dollar did not depreciate like the Thai baht, and Hong Kong people also retained their wealth. Any country that loses its decision-making power in the financial system will face disaster. However, no big country is willing to decentralize Bitcoin and defeat the financial systems of various countries around the world. Because behind this is a country’s financial security, the people’s wealth security, and the country’s long-term security and stability. So far, no major country in the world is willing to use Bitcoin as its legal currency, let alone legal currency. Even if it is used as currency circulation, few countries are willing to support it, including the United States, where capitalism is so prevalent. Bitcoin was born with the dream of becoming a currency, but it is basically impossible for it to become a dominant currency within the time visible to our naked eyes. Why should the financial systems that various countries have worked so hard to build give up to Bitcoin? Unless there are earth-shaking changes in the political system in the future, or there are violent institutions or super consortia behind Bitcoin that can overthrow all countries, especially the sovereign countries of the US dollar, the euro, and the pound, it will be difficult to gain a foothold. 03 Then we can’t help but think, what is the value of Bitcoin? Invest? If the rise of a stock is due to the growth and value created by the company behind it, then what supports a Bitcoin to skyrocket to tens of thousands of dollars or hundreds of thousands of yuan? Some people say that Bitcoin is "digital gold" because of its scarcity. Indeed, there are only 21 million Bitcoins, which has a certain degree of scarcity and will not cause inflation. However, gold, as a precious metal, is an important material in the jewelry industry, electronics industry, communications industry, and aerospace industry. And what about Bitcoin? It is invisible and intangible. Apart from the electricity wasted during mining and the jumping numbers in the account, its existence is almost impossible to feel. What value does it create? Why did it surge to such an extent? I couldn't help but be reminded of the tulip bubble in the Netherlands in the 17th century. How much is a tulip worth? The answer is a mansion in the most prosperous area along the canal of Amsterdam, the capital of the Netherlands. In the 17th century, the Netherlands accumulated a lot of wealth through colonial expansion and became the world's maritime hegemon, known as the "Sea Coachman." The Netherlands, which is so wealthy, also has the most advanced financial system in the world. At this time, tulips native to Asia began to flow to Europe along with trade. The Netherlands cultivated some novel tulip varieties, which were wildly sought after by French nobles. Smart Dutch businessmen sensed business opportunities and took the opportunity to stockpile tulips in large quantities, so that tulips became a status symbol among the Dutch aristocracy. Driven by the nobility and praised by public opinion, the Netherlands started a craze for tulip speculation among the people. Nobles, farmers, craftsmen, boatmen, chimney sweeps, old women in second-hand clothing stores... all began to rush to buy tulip bulbs. It’s not that I think it looks good, but I think that if I buy it, I will definitely make money by increasing the price. The Amsterdam Stock Exchange even opened a prescribed trading market for tulips. A tulip worth 1,000 yuan can rise to 20,000 yuan in just one month. In just three years, the price of tulips has increased more than 1,000 times. The bubble blew bigger and bigger. At that time, the per capita annual income in the Netherlands was only 150 Dutch guilders, but a tulip named "Forever Augustus" even sold for as high as 6,700 Dutch guilders. This money could buy a mansion in the most prosperous area along the canal of Amsterdam, the capital of the Netherlands. Everyone kept buying, the price of tulips kept rising, new people kept entering the market, and no one seemed to think there was anything wrong. In February 1637, people who bought and sold goods gradually realized that the time for delivery was approaching. However, once the bulbs are planted in the ground, they are difficult to buy and sell. But how much can the bulbs bought for so much money be sold for even if they bloom? For a time, the tulip bulbs that were being snatched became a hot potato, and people would rather sell them for less money. A needle pricked the bubble, and then the crisis that the bubble was about to burst began to spread rapidly. People sold off one after another, for fear of being hurt in their own hands, and the price of tulips plummeted. The price of some tulips has even dropped to 0.005% of the highest price, and some tulip varieties are not even as expensive as an onion. In this plunge, countless people lost their money and people flocked to the courts. The government had to terminate all contracts and ban speculation in tulips. The tulip bubble, unprecedented in human history, burst, but the Dutch financial system suffered a huge blow. The economy was paralyzed for three full years, and it indirectly lost its position as a maritime hegemon. Think about it carefully, what is the difference between crazy Bitcoin and tulips? For ordinary people, tulips have some ornamental value, but what does Bitcoin have? This is a Ponzi scheme, a game of drumming and passing flowers. As long as those speculators fool enough people to believe that Bitcoin will rise and let them run into the market, they can harvest waves of leeks and achieve an increase in wealth. end I have no doubt about the value of the blockchain technology behind Bitcoin, and even believe that it will be widely used in the future； I also believe that a few people will become rich by speculating on Bitcoin.； But this is by no means an investment game suitable for the general public, because behind a story of making hundreds of millions of dollars in Bitcoin are 100 stories of losing 1 million. Bitcoin that cannot increase its own value is destined to be a zero-sum game. What others make must be your loss. The day the bubble bursts is when most ordinary people cry and have no way out. After all, you are facing international financial speculators with hundreds of millions of dollars in capital. Why do you think you are better than them? Of course, if you go there with the consciousness of being a leek and a gambling mentality, you can pretend that you have never read this article. Organized and edited by Coldplay Lab First published on WeChat public account: Coollabs (ID: coollabs) If you need to reprint, please leave a message in the background. Please feel free to share it with your friends or circle of friends References:
Refuse to be a leek! ! ! |
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