Bitcoin's price continues to rise, breaking through 50,000 US dollars, approaching the threshold of 60,000 US dollars, and its total market value exceeds 1 trillion US dollars. Is it becoming a "grey rhinoceros"?
As a digital asset, the bitcoin price trend does not explain anything
Bitcoin is a digital asset, and there are no fundamentals like stocks or commodities to analyze. Its price ranges from a few cents to tens of thousands of dollars, which level is "reasonable"? Nowadays, if you think that the price of Bitcoin is too high, you may be laughed at because Bitcoin can be regarded as a "bubble" from the beginning; If it is claimed that it will plummet, it is suspected of playing the market prophet, and it will even lead to attack; If you are sure that it will rise again, you will naturally gain a lot of fans. Instead of this, it is better to vote directly with your feet ...
It is not only one-sided, or even meaningless to discuss the market value, position and trend of Bitcoin only based on the transaction price. Explaining the soaring asset price as an asset bubble or virtual nature is just like talking about its future value or even belief orientation through soaring prices. These statements are some kind of "bubble" ...
From the overall performance of the trading market in 2020, Bitcoin has the characteristics of high turnover and high volatility, which can also be used to show that the Bitcoin market is changing from retail and large-scale markets to institutional markets, and it also shows that this market is far from mature. From the perspective of the holding structure and transaction structure of Bitcoin, its distance is still far from mature transactions ...
Asset structure is more worthy of attention than total assets
As an asset, the market price of Bitcoin is marked by the marginal transaction price. The soaring marginal transaction price is often directly interpreted as the soaring value of total bitcoin assets. If bitcoins are mostly held by institutions rather than individuals, the book assets of holding institutions will rise sharply due to the rising prices of market transactions, thus improving the liquidity of the whole economic system, and the impact of bitcoins on the economic system will be greatly enlarged.
Since last fall, the relevant parties in the United States have introduced a series of regulatory policies on digital assets, such as bank custody, credit card connectivity, etc. It can be said that these measures have greatly boosted the market of Bitcoin. In February of this year, Tesla purchased $1.5 billion of bitcoin, and Blackstone will purchase it, which is similar to landmark events, which undoubtedly directly pushed up the market situation.
Only when a large number of institutional investors buy bitcoin will those huge holders choose to reduce their holdings in an orderly manner. To put it simply, the price of Bitcoin is ultimately determined by the holding stock of huge holders, not by the actual marginal trading volume. Without enough buying, you can't wake up the huge selling. It is precisely because the actual trading volume is not large, even if the price keeps rising to a new high, the stock market is full of patience.
The total market value of Bitcoin exceeded $1 trillion, which undoubtedly aroused the investment enthusiasm of the market, but it was not equal to full market confidence. In other words, it would only induce a small amount of stock to be cashed out, and would not significantly change the holding structure and trading structure.
How much bank currency should be invested to realize the full circulation of Bitcoin?
Bitcoin seems to be a huge "ice sheet", which needs a certain amount of "warm flow" to completely melt and circulate. The so-called "ice cover" refers to a huge bitcoin stock; The so-called "warm" refers to the rising transaction price, and the so-called "flow" refers to the buying of bank legal tender. The decisive factor is the buying amount paid in bank currency. If the buying is big enough, the stock will be cashed out gradually, and if the price is high enough, the buying will be maintained. Bitcoin trading is originally a buyer's market, but the seller's "patience" or "unity" is a phenomenon worth pondering and studying ...
Must be affected by some common factors, which makes the huge number of holders consciously or unconsciously maintain a "tacit understanding". Fundamentally speaking, they lack enough pressure to realize cash, but they may have the risk of cashing out instead ... Therefore, even if the price rises all the way, there is no situation of competing to cash out and leave the market. In terms of market trading structure, the existing bitcoin trading system also tends to maintain the trading situation of high frequency, high turnover rate, high volatility and limited capacity, because the rapid expansion of the market often means corresponding retraction.
Nowadays, no asset market presents a trading situation similar to Bitcoin market, that is to say, no asset trading market has experienced such drastic price fluctuations and soaring without market crisis. In other words, the bitcoin asset trading crisis can only appear in one direction, that is, the overwhelming pressure of selling and cashing out huge stocks. Once it appears, there will not be enough bank currency to take over.
However, when the price keeps rising, the selling pressure will continue to strengthen, especially after the number of institutional holders increases, which will enlarge the high-frequency trading volume and increase the volatility, which undoubtedly increases the fragility of the trading market. The effective way to alleviate this vulnerability is to expand the payment function of Bitcoin, such as buying Tesla with Bitcoin and spending on Unicom credit card. However, this is only a relief, that is to say, it has played a role of partial diversion, and it is not effectively overcome at the source. If you consider the detailed arrangement of Bitcoin due to high prices, the situation will be more complicated ...
Is Bitcoin becoming a grey rhinoceros?
If the huge stock of Bitcoin is used as permafrost and does not melt, then the crisis loss caused by high marginal transaction price or violent fluctuation is partial, or even insignificant for the whole economic system; If the huge stock is no longer frozen ice, but melts, disintegrates, spreads and penetrates, it may cater to the policy warm current of some central banks' water release expansion. Although it will not immediately set off huge waves, it will undoubtedly deepen the future financial turmoil ...
When describing the Mexican economic crisis in 1994, American economist Dorn Bush said, "The economic crisis will take longer than you think, but once it comes, it will happen much faster than you think."
After all, is Bitcoin becoming a grey rhinoceros? It means that the impact of the huge amount of Bitcoin cash on the whole social and economic system is not a great shortcoming of Bitcoin itself. Just like tulips, flowers bloom like the sea in spring and summer, and they are bright and dripping every year. It doesn't need to pay attention to whether the Dutch are sad or happy.