The traditional Chinese lunar year of the ox has not yet arrived, and Bitcoin is already bullish.
Two or three years ago, in the face of the market’s pursuit of Bitcoin, the “stock god” Buffett made his position clear: the hype in Bitcoin is speculation, not investment. He even called Bitcoin a rat poison to express his aversion to Bitcoin. Now the time has passed. As of 17:30 on January 3, Beijing time, data from the Huobi platform showed that the price of Bitcoin has exceeded US$34,000, a single-day increase of more than 8%, and the market value has exceeded US$600 billion. It is worth noting that the current market value has also come to Buffett’s Berkshire Hathaway.
In the past, there was a popular saying in the currency circle: mining is not profitable than selling mining machines. Rising Bitcoin prices often drive the Bitcoin mining machine market. Speaking of the mining machine market, everyone will immediately think of Huaqiangbei. However, a reporter from the Securities Times actually explored the Huaqiangbei mining machine market and found that this store where many “mining machine stories” had been born seemed a bit deserted.
The mining machine store is a bit “empty”
As we all know, Bitcoin is mainly “mined”. In fact, “Made in China” has firmly monopolized the design and production of various mining machines in the past few years. Shenzhen Huaqiangbei has become one of the largest mining machine sales and distribution centers in the country and even the world.
Riding the escalator to the 4th floor of Huaqiangbei Saige Plaza, the wording of the mining machine is still very eye-catching. In 2017, Bitcoin experienced a skyrocketing market. The mining machine stores here are very popular. Many stores that originally sold assembled computers have been converted into mining machine stores.
Now that Bitcoin has reached a new high, what is the situation of the mining machine store? The reporter found that the shops selling mining machines are still there, but there are also some “people go to empty shops”. Many empty shops still have signs with the words “mining, mining machines”, but they have been empty.
“Two or three years ago, the shops on this floor were almost full. Most of them were selling mining machines.” Manager Chen sold computer accessories here. He recalled, “At that time, many people switched to selling mining machines. Later, in 2018, Bitcoin Prices plummeted and it started to get cold here. At its worst, a whole row of shops was empty. What I know is that some people are now switching to online production, and some people have moved away long ago.”
“There will still be some foreigners looking for mining machines.” A staff member of a mining machine shop told reporters, “now the spot is very scarce. Some people are waiting for coins to be mined during the rainy season in March and April this year, so some people will come. Consultation, but compared to the previous pomp, everyone’s mentality is much more stable.” He also said that he is digging and selling mining machines, and of course he also fries in Bitcoin, so that he can earn faster.
Walking out of the SEG electronic market, it was getting late and there were fewer pedestrians on the road. The mining machine shops in Huaqiangbei also ended their business for a day, but their “business” has not stopped: they will release goods through WeChat every day, and they want to “make a fortune” as the price of Bitcoin rises. However, they don’t know how the currency price will change, and what will happen to the world of mining machines.
The reason behind the bullishness?
“Bitcoin and blockchain WeChat groups that have been silent for a long time are on fire again.” Huang Hua, who once worked in blockchain media, told reporters, “A lot of people are asking, how much is Bitcoin now?” Unlike the mining machine stores, the currency circle is already boiling. In the past 2020, Bitcoin has risen by as much as 300%. Even during the global market shock in March last year, Bitcoin’s trend remained stable.
The most frequently mentioned macro background behind this is the easing policies of major overseas central banks such as the Federal Reserve, as well as the optimism of institutions including BlackRock and PayPal on Bitcoin, which has triggered a large number of other investors to follow suit.
In the short term, what is the reason why Bitcoin is so bullish?
According to Daisy, a senior analyst at Huobi Research Institute, there are three reasons behind the recent continuous rise in the price of Bitcoin: one is the halving of the market, quantitative changes have caused qualitative changes, and the continuous decrease in supply has made Bitcoin more scarce and caused price increases ; The second is the further deterioration of overseas epidemics and the expectation of global economic recession. Global easing and the weakening of the US dollar have made global inflation an unstoppable trend. Therefore, the demand for Bitcoin has further increased; and the third is the market’s renewal of Bitcoin It is recognized that institutions continue to enter the market, and Bitcoin has become an integral part of the macro asset allocation of institutions. Global financial payment giants have also distributed cryptocurrencies and provided related services, which provided strong support for the price of Bitcoin. If the market peaks in the future, the power of institutions will be much greater than that of retail investors, so there may be greater fluctuations. Investors should pay attention to risk control.
Some analysts also said that the rise in the price of Bitcoin may be directly related to the holiday. Before Christmas, the price of Bitcoin was trading at around $23,000, which was also a time when market transactions were more active. With the Christmas and New Year’s Day holidays approaching, when the mainstream financial market is in the closed phase, Bitcoin’s upward breakthrough ushered in a favorable time.
It is worth noting that more and more overseas investors regard Bitcoin as a substitute for gold, and therefore transfer the assets originally used to allocate gold to Bitcoin. JPMorgan Chase is the most well-known institution that holds this view. The bank believes that the concept of “digital gold” in Bitcoin is sucking away investors’ funds in precious metals.
