Under the background of strong risk aversion of global assets, the prospect of cryptocurrency bitcoin is still full of doubts. Why is bitcoin volatile this year? Analysis of bitcoin price trend in 2019
On May 1, bitcoin, which was still at the low level of $5317, rose strongly in the next half month, breaking through the $8000 barrier and even approaching the high level of $8400. At the same time, it almost wiped out the decline in the previous nine months.
Bitcoin expert Marty? Greenspan said: 'bitcoin is coming again.' As of 9:00 a.m. on May 20, bitcoin was temporarily trading at around $7948, with the lowest price reaching $7785, but it was in the range of $7800 to $8000.
Compared with the freezing winter of cryptocurrency last year, the long short game of this year's market is more intense
On the one hand, the infrastructure supporting such assets is gradually improving. Financial giants, represented by Fidelity Investment, the world's largest asset management company, and TD Ameritrade, the second largest Internet brokerage in the United States, are lining up to enter the market and plan to launch bitcoin trading services one after another; Technology companies such as Facebook and Microsoft are also stepping up their layout. On the other hand, as early as April 1 this year, there was a firefight between the long and short camps. At that time, more than US $500 million of short cryptocurrency positions were sold out within a few hours.
Eric, a bitcoin expert, points out that the short sellers who are not willing to give up now are trying to short again, thus driving the price soaring - "they believe that the virtual high price of bitcoin is just a flash in the pan this time.".
A heated debate on space
Google data shows that bitcoin's search index recently reached its highest level in six months, and even trump is more popular.
On May 12, the US stock market was like a hurricane. The S & P 500 fell 2.4%, the Dow fell more than 700 points, and the NASDAQ fell 3.2%. On the other hand, the cryptocurrency and blockchain concept stocks rose against the trend.
Craig, Internet money analyst? He pointed out that when investors see the rise in the price of bitcoin, they are afraid to miss this opportunity and choose to buy it. Former Goldman partner Mike? Novogratz also pointed out that when governments formulate more specific regulations to attract institutional investors, bitcoin will start a new bull market, and it is only a matter of time before large institutional investors enter this field.
But can bitcoin be compared with gold, the representative of traditional safe haven assets?
The World Gold Council disagrees. The agency pointed out earlier that the correlation index between bitcoin and NASDAQ is 0.69, which is highly correlated, while the value of gold is -0.73, which is highly anti correlated.
This also confirms that the market is extremely unstable, investors are still waiting for cryptocurrency to be more widely used. Crytoslate, a well-known blockchain media, pointed out that there are defects in the feasibility of encryption assets as a hedge against global financial instability.
On the other hand, behind the currency fluctuations, there is no lack of short profits to leave the scene.
Bitfinex, the cryptocurrency trading platform, saw its bitcoin short position plummet by 40% on May 16, and its short position dropped rapidly from 27000 to less than 17000, reaching the lowest point of this year. According to aicoin data, the net outflow of bitcoin on May 16 exceeded US $3 billion, while on May 17, when the value of bitcoin fell sharply, the net outflow was as high as US $8.314 billion by noon of that day.
The departure of bears also indicates the foundation of bitcoin and the possibility of the rise of bulls. According to market analysis, bitcoin's short-term positioning at US $8400 is expected to drop sharply after reaching the top. After the correction, it will also bring investors a huge buying opportunity.
Mr. Buffett is not optimistic
The old-fashioned investors represented by Warren Buffett have always been skeptical of bitcoin.
In 2019, which just passed, Berkshire? At the general meeting of Hathaway's shareholders, the octogenarian stock god compared bitcoin to gambling. Although he agreed with the prospect of blockchain technology, he scoffed at bitcoin: "it has never produced anything."
From the past experience of bitcoin's ups and downs, the high value of the currency often conceals the capital flow behind it, so large players are also suspected of market operation.
Looking back at the heyday of bitcoin, which broke through the $19000 mark at the end of 2017, it quietly collapsed in the second half of 2018: its market value dropped 81%, to a low of $3200. At that time, John middot, a professor of finance at the University of Texas; Griffin has questioned the trading behavior of bitfinex and its related company, tether. In his paper, he concluded that tether was used to manipulate the price of cryptocurrency, and its contribution accounted for about half of the market increase.
According to the data of token analyst, a blockchain data provider, within five days, including bitfinex, bitmex, bitmex, etc Several major trading platforms, including binance and Kraken, have seen outflows of US $622 million more than inflows.
Wimmer financial LLP, founder of Wimmer financial LLP in London, also warned that the cryptocurrency market is mainly dominated by the 'top ten whales', "they have abundant funds, occupy a lot of market space and volume, and it is too easy to manipulate the market.".
But in any case, the entry of giants has become a foregone conclusion, and the cryptocurrency market may not be the initial Utopia for grassroots to get rich overnight.
"Top VC companies like Andreessen Horowitz are constantly investing in cryptocurrencies, and the investments of technology giants like IBM and Facebook are also behind the recent rise of bitcoin," said Frankel, vice president of token Kin products From this point of view, the positive trend of cryptocurrency makes sense. We believe that in the future, there will be a large number of integration actions in this field, and many tokens will disappear. But when the small roles are eliminated, the big ones will survive. "
The so-called spring to summer solstice, will be a leek growing season.