On the evening of December 16, Bitcoin stood at $20,000 in one fell swoop, and successively broke through the $21,000, $22,000, and $23,000 barriers, breaking through historical highs, and then falling back to less than $23,000. According to the price of Coindesk, the Bitcoin news information network, the highest Bitcoin price reached US$23,770.85. As of press time, the price of Bitcoin is about US$22,664, an increase of 14.89% in 24 hours. The transaction volume of Bitcoin in 24 hours is US$51.74 billion, with a market capitalization. 420.59 billion US dollars.
In addition, according to the contract statistics report, in the past 1 hour, the entire Bitcoin network has liquidated a total of 571.9 billion U.S. dollars, and the entire Bitcoin network has liquidated 903 million U.S. dollars in 24 hours, with 41,741 people liquidated.
A Bitcoin investor told The Paper News reporter: “There is no special feeling. I feel that this day will come sooner or later. It is just a matter of time. And Bitcoin has a four-year cycle, so it is relatively more regular. Normally. Under circumstances, breaking new highs should be the end of the year or the beginning of next year.”
He believes that US$20,000 is an important psychological barrier, not only a goal, but also an important psychological pressure point. “Once this point is broken, many investors’ confidence in buying coins will increase. The position or liquidation, so it pushed up the price so much at once.”
Bitcoin becomes the third most crowded transaction
Since late October, the price of Bitcoin has entered a period of rapid growth starting from $11,000. After more than a month, on November 30, the price of Bitcoin exceeded Coindesk’s all-time high of US$19,665, and has since approached the US$20,000 mark several times. On December 16, Bitcoin finally broke through $20,000, and even broke through $23,000 at one time, and now it has reached $22,000-23,000.
In this regard, OKEx Research chief researcher William believes that the main force of this round of bull market undoubtedly comes from the entry of institutional investors and high net worth individuals. This can be confirmed from the GBTC product data of Grayscale Fund.
William said that GBTC funds are similar to ETF funds, but there is no redemption mechanism, and there is a 6-month lock-up period in the secondary market. GBTC’s primary market subscription is only open to qualified investors. According to its third-quarter financial report, 80% of its customers are institutional investors (mainly hedge funds), so it is a good indicator of institutional capital entry .
“According to the latest data, GBTC’s total holdings are close to 570,000, which is an increase of 58.3% in less than half a year compared to the 360,000 holdings at the beginning of June. This shows that in the second half of this year, a large amount of institutional funding began. Pour into the Bitcoin realm.” William said.
On December 10, according to Bloomberg News, according to a survey conducted by Bank of America between December 4 and December 10, about 15% of fund managers stated that Bitcoin is currently the third most crowded transaction, second only to Go long technology stocks and short the dollar. These fund managers manage $534 billion in assets.
On December 11, Wall Street reported that the American life insurance company MassMutual had purchased $100 million in bitcoin for its general insurance account through the New York Digital Investment Group (NYDIG).
In addition, a recent report released by PricewaterhouseCoopers shows that in 2020, more and more institutional investors will enter the cryptocurrency market, including JPMorgan, Standard Chartered, and Citi Group. , Deutsche Bank and DBS Bank Group, and even many institutions began to underwrite the asset regularly.
Root cause: changes in global macroeconomics
William believes that the fundamental reason for the entry of institutional funds lies in the changes in the global macroeconomic situation this year.
“On the one hand, due to the impact of the epidemic, the global economic recovery will slow down in the next year; on the other hand, the central bank’s unconventional monetary easing has pushed up inflation expectations in the financial market. In an economic environment of high inflation, low growth and negative interest rates, in order to avoid nominal With the loss of principal and the need to pursue higher returns, investors’ demand for hoarding cash has naturally evolved into a demand for gold, gold and a substitute for gold-Bitcoin.” He said.
Daisy, a senior analyst at Huobi Research Institute, said that the recent global epidemic has shown signs of recovery, and vaccine supply has not yet met demand. The US stimulus bill may be introduced again, and the US dollar continues to depreciate. The US dollar index continues to fall close to the low point of 2018. The market’s demand for assets that can effectively counter inflation expectations in the US dollar has further increased. Therefore, the medium and long-term demand for Bitcoin has not weakened, but has strengthened.
In sharp contrast to the rising Bitcoin price, on December 17, the US dollar index fell below the 90 mark, the first time since April 20, 2018.
From the perspective of technical analysis, William pointed out that around December 12, after the upper pipeline of the symmetrical triangle was crossed by the Bitcoin price, it indicated that the Bitcoin price would usher in a big increase in the future and the transaction volume would also increase. Therefore, around December 16, Bitcoin broke through the $20,000 mark and ushered in a record high.
“At present, the market’s expectations of low global economic growth and high inflation have not changed significantly. Therefore, Bitcoin will continue to increase in the future, and the price will continue to hit new highs.” He said.
Investors need to be rational
It is worth noting that William emphasized that after the price of Bitcoin exceeded the $20,000 mark, a large number of investors began to flood the cryptocurrency market, which once caused some cryptocurrency exchanges to experience stagnation or downtime. This indicates that the main investment force in the market may undergo structural changes, from institutional investors to small and medium investors. The excitement and enthusiasm of the market is further amplified, which may cause large fluctuations in the price of Bitcoin. It is hoped that market investors will remain rational and do not increase leverage.
The aforementioned Bitcoin investor said, “Generally, if the market enters a period of rapid growth. Then you still need to exit the risk a bit.”
