Text ︱ Esens
“When I wake up, I have witnessed history again.” For some time, the word witnessing history has become commonplace for Amber.
As of 5 o’clock on January 11, 2021, the current price of Bitcoin is about 38,000 US dollars, and the high point has reached 41,900 US dollars. Analysts believe that institutions have promoted the rise of Bitcoin and even the entire cryptocurrency market, and more and more institutional investors have shown strong interest in Bitcoin.
According to the January 2021 cryptocurrency outlook report released by the Bloomberg team on January 9, Bitcoin as an asset is maturing. The report pointed out that $50,000 may be the next stop for Bitcoin. And as Bitcoin attempts to break through the resistance level of $50,000, Bitcoin’s all-time high of $20,000 is serving as its base point.
However, under the skyrocketing rise, Bitcoin is always facing strong doubts and torture. On January 9, the Economic Daily published an article “How Long Can Bitcoin Run?” Analysts in the article warned that it is foreseeable that in 2021, the Bitcoin market will still be haunted by labels such as automated market makers, huge volatility, ultra-high yields, anti-fiat currency, and the central bank system. Preventing excessive speculation of Bitcoin and thereby pushing up systemic risks should become the shared responsibility of global financial regulators and market participants.
In fact, every market is a lively stage. The souls wandering between greed and fear, and the various figures who make money and make huge losses, work hard on the way of making Bitcoin rich almost every day.
Is 50,000 USD expected?
Since Bitcoin broke through $30,000 on January 2nd, it has been like a black horse running out of steam, holding back its energy and advancing all the way. According to Asset Dash data, as of 5 o’clock on January 11, 2021, the current price of Bitcoin is about 38,000 US dollars, with a market value of 707.7 billion US dollars, ranking 9th, behind Tencent and ahead of Alibaba. A few days ago, Bitcoin once surpassed Tesla and ranked sixth.
Bitcoin market capitalization ranking among global market capitalization assets
At the same time, Bitcoin transaction activity has increased again. On January 8, Skew data showed that the daily trading volume of Bitcoin futures exceeded $100 billion for the first time.
Glassnode data also shows that the number of addresses currently holding more than 1,000 bitcoins has reached 2,334, a record high. This shows that the “giant whale” is still bullish on Bitcoin and continues to buy it to drive the price up.
Among them, Grayscale Bitcoin Trust, as the largest encrypted digital asset trust product of Grayscale, has become one of the largest entities buying bitcoins driven by the needs of institutional investors. Data shows that its total amount of custody has increased from US$2 billion at the beginning of 2020 to US$28.4 billion on January 8, 2021.
At the same time, OKLink data shows that on January 6, the number of active addresses in the Bitcoin network was 1.291 million, and the number of active addresses in a single day on the network reached the historical peak in January 2018. Since April 2020, the number of daily active addresses on the Bitcoin network has maintained an upward trend, and has shown substantial growth in the past 60 days.
In addition, on January 7th, the Tokenview chain data monitoring showed that the net outflow of Bitcoin from the centralized exchange continued to increase in the past week. Among them, Bitfinex and Huobi have the most prominent net outflows. Binance will still have a net inflow at the end of each month, and then show a net outflow in the middle of the month. The week-on-week net outflow growth rankings were Bitfinex 150%, Binance 51.41%, and Huobi 44.32%, from high to low. According to statistics in the past four months, the total amount of bitcoins on Binance, Huobi, Bitfinex and other exchanges has flowed out at least one million.
“Looking at this posture, after the Bitcoin market is corrected, there is a high probability that the starting line will be re-established.” Senior player Selina said.
Not only that, the Bloomberg team’s January 2021 cryptocurrency outlook report pointed out that the current institutional bidding seems to be intensifying, and $50,000 may be the next stop for Bitcoin.
The report believes that Bitcoin seems to continue its price increase pattern in early 2021, and there may be a sudden negative news before it will return to the support level of $20,000. At the same time, the report also stated that Bitcoin is attracting traditional gold investors, and more traditional gold investors are increasingly allocating funds to Bitcoin. This makes Bitcoin as an asset mature.
The mining competition is getting fiercer
“Miners are the biggest winners of the bull market.” F2Pool CMO Qingqing said in a recent event that the trend of large numbers of institutions entering the market is becoming more and more obvious, the demand for bitcoin is increasing, and the easiest way to obtain bitcoin is to mine.
Senior miner Xiaohai said that in terms of revenue per “TH/s”, Bitcoin mining revenue has more than tripled in the past three months. “At the beginning of October, the revenue per’TH/s’ was about 0.07 to 0.08 US dollars, which has soared to 0.27 to 0.28 US dollars in the last week.” He further said. This shows that miners are one of the biggest beneficiaries of the bull market.
Along with it, the mining machine market has recovered again. According to a mining machine sales manager in Huaqiangbei, since November 2020, as the price of Bitcoin continues to rise, not only is the supply of new mining machines in short supply, but second-hand mining machines have also become popular.
On January 9th, “Bitcoin mining machine prices doubled but still in short supply” appeared on the hot search. According to Pear Video, on January 8th, in the Shenzhen Huaqiangbei SEG Market, the shops selling mining machines were still there, but there were also some “people going to shop empty”. The salesperson of the mining machine said that the price of the mining machine has doubled within two months, but the supply is still in short supply, depending on whether you have the supply.
While mining machines are in short supply, the difficulty of mining continues to rise. According to OKLink data, at 23:25 on January 9th, the Bitcoin network ushered in a difficulty adjustment at the height of 665280. This time the difficulty was adjusted to 20.61T, an increase of 10.79%. The next mining difficulty adjustment time is about January 22, and it is expected that the difficulty will increase again by 10.43% to 22.76T, which will hit a record high by then.
Bitcoin network computing power and mining difficulty
Unfortunately, the nuclear finance app learned from multiple mines in Sichuan that due to the low water period leading to power shortages, Sichuan has imposed mandatory requirements on cryptocurrency mining, which has made most mines very tight, or even more expensive. A mine is in a power outage state.
In addition, in order to alleviate the shortage of electricity supply in Sichuan Province, the State Grid requested the hydropower station to stop powering the big data center from December 8. This is undoubtedly very detrimental to the local mines.
However, Bitcoin mining has made new flowers in North America. At the end of 2020, Marathon Patent Group, a listed mining company in North America, reached a mining machine sales contract with Bitmain to purchase 70,000 Ant S19 ASIC mining machines for USD 170 million. According to people familiar with the matter, the order is expected to be fully delivered by the end of 2021.
On January 1, according to a Bloomberg report, the Nordic region, especially Norway and Sweden, had mild weather in the past 20 years, which helped to increase the power generation of hydroelectric power plants. For Bitcoin miners, the cost of electricity will change. It is becoming more and more important, so the record low electricity price in Sweden and other places may make it a favorable place for Bitcoin mining.
On January 6, Golden Finance reported that Marathon Patent, a Nasdaq-listed company, and Canadian miner DMG announced that they would cooperate to establish the first cooperative mining pool in North America. The partnership aims to integrate resources together to further realize the diversification of Bitcoin hashing and increase transparency among miners.
Analysts believe that, given that domestic mining is affected by power factors, overseas mines may usher in a good opportunity to accelerate development.
Market controversy was mixed
Regarding Bitcoin’s leaps and bounds and the FOMO sentiment generated by investors, public opinion has mixed about this, and greed and fear have always been in the mind of investors.
Peter Schiff, CEO of Euro Pacific Capital and an opponent of Bitcoin, declared on Twitter that although the price of Bitcoin has exceeded a record high of $40,000, it cannot be called a “disruptive technology” because it has not disrupted anything. . Neither the central bank nor the government has lost any power, and this is true no matter how high the price of Bitcoin rises. But Schiff believes that if the price of gold soars to US$10,000, the legal currency system will easily collapse.
Recently, the “Economic Daily” also commented that at present, bitcoin transactions are still drifting in a gray area. With the development and launch of legal digital currencies in various countries in the future, the control or pressure on virtual currencies will increase, and the investment space of bitcoin will increase. Greatly compressed. Experts said that there is no endorsement by a credible country or organization, nor is it linked to any physical assets. When a sovereign country declares Bitcoin illegal, Bitcoin may be worthless.
In addition, “Economic Daily” quoted analysts as warning that investors should be wary of speculative risks in the Bitcoin market: on the one hand, the Bitcoin market is still small and easy to manipulate; on the other hand, the world has not yet established sound Bitcoin market supervision. mechanism.
What is commendable is that Cointelegraph issued an article saying that Newsweek, one of the largest weekly news magazines in the United States, had a positive evaluation of Bitcoin in a recent article and explored whether Bitcoin can become the new gold standard. The article uses the latest model of JPMorgan Chase to analyze the claims of digital gold, saying that the model shows that the potential price of Bitcoin is $146,000. Although the article does not provide any new information for crypto enthusiasts, it proves that the mainstream narrative surrounding cryptocurrency has changed.
At the same time, CryptoCompare CEO Charles Hayter told CNBC that looking ahead, the crypto market has “two clear catalysts”, namely, the approval of the Bitcoin Exchange Traded Fund (ETF) and the successful completion of the IPO of Coinbase.
Industry analysts believe that if it is successfully approved, it will be the first Bitcoin ETF approved by the US SEC. However, similar products of Bitcoin ETF have not been approved by the US SEC in the past few years. VanEck has also applied for similar products twice, but they have since been withdrawn. Recently, Michael Sonnenshein, managing director of Grayscale, said that we believe that Bitcoin ETF is a matter of time, not whether it is launched.
On December 17, U.S. Eastern Time, Coinbase, the largest cryptocurrency exchange in the United States, announced that it had submitted an IPO application to the SEC. In this regard, Ouriel Ohayon, CEO of Bitcoin Wallet ZenGo, said that the importance of Coinbase’s IPO cannot be overstated in any case. He believes that the listing of Coinbase may lay the foundation for the future development of the entire industry. It confirms that the industry is maturing and attracts strong players.
