500 yuan admission, 2 hours to become a millionaire, I experienced this wave of Bitcoin skyrocketing

500 yuan admission, 2 hours to become a millionaire, I experienced this wave of Bitcoin skyrocketing

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Source | Microscopy Story

Author|Xiaobei Editor|Zuo Ran

Bitcoin, a currency that has only been produced for 12 years, is becoming more and more crazy.

It is the first encrypted digital currency. In 2008, geek Satoshi Nakamoto proposed this concept, and it was officially released on January 3, 2009. It has the basic properties of currency: it can be traded, it can save, and it can exist as a measure of value. However, it is different from the legal currency of various countries in that it is not issued by a specific currency institution, but based on algorithms.

The transaction is not controlled by a centralized organization, but the transaction information is encrypted by cryptography, and the information is embedded in one block chain after another. It is different from the current legal currency in form, use, and transaction methods, and is limited in quantity and scarce. This makes many people consider not only its currency attributes, but also its investment attributes when buying Bitcoin.

In the first month of 2021, Bitcoin ushered in a wave of rapid rise. On January 9, Bitcoin rose to nearly 41,000 U.S. dollars, and its market value exceeded that of Facebook, which surpassed 765.4 billion U.S. dollars. Compared with its initial use as currency, the price has risen more than 12 million times.

But Bitcoin will not continue to rise continuously. On the eve of the publication of this manuscript, Bitcoin plummeted, with nearly 10 billion liquidation in 24 hours, and 180,000 people becoming victims of liquidation.

This microscopic story tells about a group of people who bought Bitcoin, among them:

Some people buy bitcoins because they feel that things are scarce, and they follow the trend when others buy them. They did not expect to earn 5 more years of salary because of bitcoins;

Some people are interested in technological innovation because of watching American TV dramas and are willing to make value investments in the lower-level blockchain technology of Bitcoin. She looks at Bitcoin from the perspective of an early equity investor and believes that it has a promising future;

Some people use valuation models to value Bitcoin and think it is a perfect investment. In addition to a car and living expenses, 99% of their assets are invested in Bitcoin; some people are pulled into the car by the boss and bought it with 100,000 yuan Currency, opened 10 times leverage, within 2 months, 100,000 became 2 million…

The following is the true story about them:

In 2 months, 100,000 became 2 million

Buying coins allows me to buy a car, buy a house to improve my life

Key practitioner of a digital currency exchange

In 2018, I joined a domestic digital currency exchange. At that time, in order to get familiar with the entire exchange process, I started speculating on coins, but I didn’t expect to make much money with coins.

In the early days, what I played the most was Aircoin (a virtual currency without physical support).

Many popular air coins, their prices will be high by some people when they are listed on the exchange. It may be an oolong finger (stock traders, traders, stockholders, etc.) accidentally type the wrong price, quantity, direction, etc. when trading. Information), it may also be that the buyer’s enthusiasm in the market is too high.

At that time, I basically took 1 to 2 thousand dollars at random, and could make 3 to 4 thousand dollars or more.

When I made the most money , I used a cost of 7 yuan in a big private equity account Oolong Index and picked up more than 300,000 yuan in chips. However, the project team ran away and only made ten to twenty thousand in the end.

In April 2019, I started to play Bitcoin in a heavy position. At that time, the boss of our exchange, after learning about it, went to my desk and said excitedly, “You must try contract trading.”

Out of trust in my boss, when the Bitcoin price was 4,000 US dollars, I paid 100,000 yuan and opened 10 times leverage to do more . By the end of the quarter, that is, at the end of June 2019, 100,000 became 2 million .

This time the contract allowed me to accumulate the principal, and then I successively bought in through the contract and cash, accumulating a certain amount of Bitcoin.

But the process of investing in Bitcoin has not been smooth sailing.

In March 2019, I experienced a Bitcoin contract liquidation. At that time, the price of Bitcoin dropped directly from about US$10,000 to more than US$3,000. The liquidation point was more than US$4,000. I stopped loss of 400,000, which accounted for 10% of the entire position.

500元入场、2小时成百万富翁,我所经历的这波比特币暴涨

During that time, I was in a bad state of mind for several days in a row, and I was in danger of being almost completely blown up. I am scared to think about it now. At that time, the price of Bitcoin fell to the bottom, but out of prudent consideration, I did not dare to buy the bottom, and of course I did not sell it. I have also done some swings before. In October 2020, the price of Bitcoin was basically sideways, adjusting back and forth between US$10,000 and US$11,000. I originally wanted to do some swings to make a little money, but I didn’t expect it to be empty. Later, I bought it back and lost tens of thousands . These are all previous investment attempts. Now that the amount of funds is relatively large, I don’t want to take too high risks, so I don’t want to hold the spot, open a small capital contract to earn living expenses, and enjoy the status of dividends brought by Bitcoin. In this process, I have experienced many people’s liquidation, and I have also witnessed the wealth of many people. For example, an exchange leader announces that the exchange will be closed, and users can withdraw funds. Because he achieved true financial freedom, he didn’t want to work for the company anymore. There were also people with 500 RMB, which became less than 1 million in one or two hours, and then they were instantly liquidated. For example, a big man was given a targeted needle, and his position was destroyed by 80 million US dollars (approximately RMB 510 million). For example, the exchange is not even the pot end, and even the interns cooperate with the investigation to drink tea.

500元入场、2小时成百万富翁,我所经历的这波比特币暴涨

In my opinion, contract trading is actually not much different from gambling. When you have no money, you can also think about changing a bicycle to a motorcycle. If you have money, you don’t want to take such a big risk. I am still optimistic about the price and value of Bitcoin for a long time, and I am not afraid to increase the stock when I am ready to drop below.

In fact, it seems that the possibility of a big drop is not very large, and I don’t think it will ever fall below $20,000. Everyone’s consensus has been strengthened, and the amount of short-selling funds is much lower than long-selling funds.

Without a big black swan event, it is difficult to break below. I don’t care about the daily rise and fall. I’m up and happy; I’m down, do something else to forget it, and look at it later, it should be back again.

After earning some money, the mentality will indeed change. When looking for a job, it will no longer be considered because of salary issues, because now the salary is not used to improve the life, and the salary is only used for daily food and drink.

It’s not easy to look at the price when you buy things. For things like cherries and strawberries, you don’t feel the pain of buying them for ten catties. Now I have a car on hand. I bought it through a contract. Although I didn’t buy a house with Bitcoin, I still have it.

After experiencing the rapid rise and fall of Bitcoin before, my current investment strategy is becoming more and more cautious. Because I have a family and children, I will seek security as a whole.

But I will not sell it again.

Mining by yourself, buying coins by yourself, value investing in Bitcoin

I will not sell until I feel the sense of accomplishment

Kaka primary market fund practitioners

In 2017, I worked as a financing consultant in the primary market and had colleagues working on blockchain projects. That was the first time I heard about Bitcoin.

In 2018, the economic environment was down. I found that the money in the market was decreasing. In addition, many entrepreneurial projects began to find it difficult to get money. I began to reflect on the problems of the industry, learn about finance and currency knowledge, and understand the economic cycle. Chain is a disruptive technology.

So I tested the waters in the second half of 2018 and bought 100 yuan of Bitcoin. I made a fixed investment once a month and bought it at a low price. At the same time, I also started mining.

500元入场、2小时成百万富翁,我所经历的这波比特币暴涨

Around 2017, the price of Bitcoin increased, and many people invested to become mine owners. But then the price of Bitcoin fell, and it was difficult for the mine owner to pay back, so he made a decision: rent out computing power.

At that time, a 180-day computing power pack was released, telling you that you can mine a few. The computing power pack I bought at that time can mine 3 or 4 yuan of Bitcoin every day. After mining, it will be allocated to mine. In the wallet.

But now that Bitcoin has soared, this kind of computing power package has been robbed.

During the epidemic, Bitcoin fell particularly badly for a while. At that time, no mining plant could recover its costs, but buying computing power and Bitcoin was particularly cost-effective. It’s a pity that I was timid at the time and only bought 5,000 yuan in bitcoins. Now I feel that I am really losing money.

There is a saying in investment: “You will never make money beyond what you know”, which is also common in Bitcoin.

When you don’t realize what Bitcoin is, or don’t realize the value of Bitcoin, you can’t make this part of the money.

500元入场、2小时成百万富翁,我所经历的这波比特币暴涨

I think Bitcoin is a new economic system, and sooner or later, everyone will eventually integrate into it.

Bitcoin has two risks:

One is the regulatory risk;

Early countries where digital currency emerged, such as Germany or the United States, already have some relevant experience and procedures, and they have tried every means to incorporate digital currency into the regulatory process. However, China does not yet have relevant policies. What the country will do will become a risk point. .

The second risk has been discussed in academic theories: quantum computers;

The entire operating process of Bitcoin is based on mathematical operations, but quantum computers have strong computing capabilities, which will subvert the entire underlying logic of blockchain technology. But this part of the discussion is still stuck in the theoretical circle. It will take a hundred years to build a very mature quantum computer.

So I think that within 20 years, the industrial technology revolution will not be able to subvert it.

The short-term volatility is normal, because now Wall Street is entering the game, and the dealer will pull the market up and down, throwing away the minority shareholders to make money.

A clever way is: if you buy it without moving it, look at it a few years later, it will definitely rise.

I am currently earning a 90% return through Bitcoin.

In the future, even if Bitcoin rises, I will not sell it. I am optimistic about the blockchain and Bitcoin technology, hoping to watch it grow step by step, and wait until I feel a sense of accomplishment.

99% of assets invested in Bitcoin

A perfect investment, the more the currency depreciates, the higher the price of Bitcoin

Little A, a Bitcoin fund practitioner

In 2018, I had dinner with my friends and talked about Bitcoin. At that time, its price had risen from a few hundred dollars to 20,000 dollars, which aroused my interest.

With the upgrading of cognition, I started to increase my position in Bitcoin. Starting from the second half of 2019, as long as I have spare money, I will buy some Bitcoin.

The logic of Bitcoin and the entire system behind it is perfect.

We have a valuation model in the industry, the S/F model , which can be simply understood as a model for comparing stock and flow.

500元入场、2小时成百万富翁,我所经历的这波比特币暴涨

When we compare the price of Bitcoin with its scarcity, we will find that there is a strong positive correlation between the two, and the positive correlation coefficient is very close to 1.

In other words, if the scarcity fluctuates by one unit, the price will fluctuate by one unit, and the value time is 10 years.

There are only 21 million bitcoins in total, and its scarcity is certain, and the longer the time, the higher the scarcity, and its future price will continue to spiral upward. Judging from the data of the past 10 years, this is indeed the case.

500元入场、2小时成百万富翁,我所经历的这波比特币暴涨

After the epidemic, my colleagues and I have a judgment that central banks of all countries represented by the Federal Reserve will carry out a round of substantial easing. After the implementation of the loose monetary policy, a large amount of liquidity will be injected into the market.

In 2020, the U.S. M1 increased by more than 50%. At that time, the Federal Reserve distributed 21% of the world’s stock of U.S. dollars to the market. That is , 21% of the world’s U.S. dollars were printed in 2020. This is more terrible!

Both the U.S. dollar and the Euro are releasing water, and a large part of the released liquidity enters the financial system, allowing financial assets to expand.

Bitcoin’s anti-inflation properties are very strong, even higher than gold.

The scarcity of gold is based on scarcity at the physical level, and the mining of gold will keep the total amount of gold increasing. But Bitcoin is based on absolute scarcity at the mathematical level, and as the halving progresses, Bitcoin will become more scarce in the future.

At this stage, the biggest risk of investment is the risk of holding cash. The purchasing power of legal currency is shrinking, and a fixed amount of Bitcoin can well hedge against currency oversupply.

The more fiat currency is issued, the more the purchasing power of the fiat currency depreciates, and the purchasing power of the bitcoin I hold will rise accordingly.

Based on this consideration, except for a car and some basic living expenses, the rest of the money is invested in Bitcoin. The average purchase price is about seven to eight thousand US dollars.

Because I enter the venue late, there are many people who enter the venue early, and the investment cost is lower than mine. But in the future, I hope to realize financial freedom through Bitcoin investment.

500元入场、2小时成百万富翁,我所经历的这波比特币暴涨

The analyst who proposed the S/F model later proposed a cross-asset model to observe the main stages of Bitcoin through this model: the first halving, the second halving, in the past May 12, 2020 The daily halving compares the market value and scarcity of gold and real estate.

After analysis, we found that they are highly correlated, and the future valuation of a single Bitcoin should be close to 300,000 US dollars. Citibank has also issued a research report that Bitcoin will reach 318,000 US dollars.

But we believe that in the long run, the price of Bitcoin is far more than $300,000. Before his death, Hal Finney, who developed the system with Satoshi Nakamoto, estimated that the value of Bitcoin against the target was equivalent to the wealth of all households in the world, about 100 trillion US dollars.

500元入场、2小时成百万富翁,我所经历的这波比特币暴涨

According to this estimate, the price of a single bitcoin is more than 10 million US dollars. Moreover, because the central bank continues to release water, the price of Bitcoin will increase, and its price ceiling can be very high.

However, I don’t recommend that you buy it in a hurry. The capital market will always have the opportunity to make money, but your principal is limited. It is recommended that those who want to start should read more books and wait until the knowledge is in place to make money.

Pay attention to some pits when buying. For example, in the deposit and withdrawal process, if the funds are stuck to some unclean money, your bank card may be frozen.

Another example is the custody risk. The private key is the highest control authority for bitcoin assets. If the private key is lost, your bitcoin will be gone.

At present, the private keys of most people in China are controlled by exchanges, which is equivalent to someone else keeping your bank card password, which is very dangerous.

Another example is the risk of futures. Many transactions are related to derivatives of Bitcoin contract products, and the leverage is very high, as high as 100 times or even 1000 times, which is extremely dangerous.

On March 12, 2020, the global financial market shook sharply. Many institutions first added liquid assets, and the cryptocurrency market became the first target to be hacked.

We have a client who managed more than 20 million bitcoin futures for others. At 6 o’clock in the afternoon, he went to take a bath after eating. He was fine before taking a bath. After taking a bath, more than 20 million yuan was sold out, and the price suddenly dropped. , Too late to close the position.

He opened a leverage of 20 times and the loss was staggering.

The Bitcoin market itself is highly volatile. If you add dozens of times of leverage in a highly volatile market, you will definitely make more profits, but you must be careful when you lose money quickly after falling.

In the short term, I will not sell the Bitcoin in my hand. It is unlikely that it will fall below $20,000. If I sell it, it is difficult to find a low price to buy it back.

Unless there is an emergency situation where the family is in urgent need of money, then I may realize some of it, but I will not throw away all of it. Bitcoin is a good asset now.

I made 5 years of salary with Bitcoin

The price is rising, and the price comes from everyone’s consensus

Tingyou Internet employees

As early as seven years ago, I knew about Bitcoin, but I was not very interested in it at first, I just thought it was a scam.

In 2017, my wife started working on digital currency related work. It just so happened that Bitcoin also ushered in a bull market at that time. The people in my wife’s company were following the trend and I also invested tens of thousands of dollars to buy Bitcoin with the venture.

My wife and I are very afraid of risks. We didn’t touch the contract or leverage, and only dared to take the spot of Bitcoin. In that bull market, especially when the end of December is near the peak, Bitcoin can rise by 10-20% in a day.

I still remember that one day I swiped the coin price on the way from work, and it rose to 100,000 yuan. I was so happy that I felt that there was 10,000 yuan in my pocket!

But after reaching its peak, Bitcoin quickly fell to $3,000. Because we are not sure whether it can rise back, we did not sell it, and we did not continue to buy it. Now it is considered to be short.

Several colleagues of my wife were optimistic about the rise of Bitcoin during that time and bought a lot. In the next few months, Bitcoin rose to $13,900, and they made a lot of money.

500元入场、2小时成百万富翁,我所经历的这波比特币暴涨

There was a classmate who had just graduated for one or two years and had been on a contract, earning tens of millions in a few months of that year.

With the success stories of these people, I am willing to think about Bitcoin. Why does it rise?

I used to think that Bitcoin is “air”. People usually buy stocks and funds that are linked to company performance, but Bitcoin does not have an entity that can be evaluated.

Its price is a consensus. We think it is valuable, and its price will gradually increase.

Some people think that Bitcoin is not constantly issued like legal currency, and has a constant quantity and value; some people think that Bitcoin’s lower-level blockchain technology is valuable, and some people think that the concept of encrypted digital currency is valuable…

Everyone has their own interpretation of Bitcoin, and they buy Bitcoin because they believe in this interpretation.

These explanations continue to strengthen. More people know about Bitcoin and want to buy Bitcoin. Coupled with inflation, the price of Bitcoin is getting higher and higher. These explanations will further strengthen themselves.

According to current trends, these explanations cannot be falsified. This is the core of its rise.

Bitcoin is very similar to the Dutch tulip that was popular before. It is precisely because the players have a consensus that the price will rise.

But the difference is that tulips can be produced continuously and in large quantities. When the supply increases, tulips will become less and less valuable.

The number of new bitcoins is decreasing.

When Satoshi Nakamoto created Bitcoin, he considered the issue of quantity. Every 4 years, the number of Bitcoin mined would be halved. It may be possible to mine 50 bitcoins in 10 minutes at the beginning, but after 4 years, only 25 bitcoins can be mined in 10 minutes. In another 4 years, 12.5 bitcoins can be mined.

The number of bitcoins as a whole is fixed and determined, only about 21 million. This is the supply side, and the number of bitcoins is fixed.

On the demand side, more and more people want to buy Bitcoin. Now that there are exchanges and electronic wallets, it is getting easier for everyone to buy Bitcoin, and the purchase demand can be further stimulated.

For example, there are some trust funds in the United States that use retail money to help buy bitcoin, and they can collect 500 million US dollars in commissions every year.

They don’t need to do any research, they can make 500 million US dollars each year, how good this money is!

Therefore, a large number of institutions in the United States have poured in to set up Bitcoin funds to help retail investors buy. The continuous entry of off-market institutions and retail investors has also caused the price of Bitcoin to rise rapidly.

After the price of Bitcoin rises, everyone will be more optimistic about the future of Bitcoin and firmly determined to hold it, so that the consensus will become more and more cohesive, and the cohesion will be faster and faster.

In March 2020, due to the epidemic, the price of Bitcoin dropped rapidly.

500元入场、2小时成百万富翁,我所经历的这波比特币暴涨

At that time, we didn’t hesitate to start immediately. On average, the average price of buying Bitcoin was less than $4,000 at that time, but the money earned was equivalent to my 5-year salary.

In the future, I am still optimistic about Bitcoin. Under normal circumstances, I will not give up holding it, unless the family needs a large amount of expenditure, such as buying a house, which may sell part of it.

Bitcoin’s current rise and price are already somewhat risky. If I were to spend more than 200,000 yuan to buy a bitcoin, I would still have a guilty conscience.

But I think that if the family has surplus money, one or more bitcoins can be allocated as a family investment. In the future, I think the price of Bitcoin will get higher and higher, and getting in the car will only get harder.