One day rises more than $5,000, Bitcoin staged a major reversal, business intelligence software giants enter the market

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Bitcoin rises more than $5,000 in one day and staged a major reversal

Before Bitcoin broke through $33,800 in intraday trading on Friday, the business intelligence software giant MicroStrategy announced earlier that day that it had invested $10 million to purchase about 314 Bitcoins. As of that day, it held more than 70,000 Bitcoins and accumulated purchases. The price is more than 1.1 billion US dollars.

Bitcoin, which experienced a heavy setback, staged a strong rebound in intraday trading on Friday.

On Friday, US stocks rose above 33,800 U.S. dollars in midday trading, which was more than 5,000 U.S. dollars higher than the nearly three-week low of 28,800 U.S. dollars in early trading in Asia.

This is a strong rebound after losing more than $5,000 in intraday trading on Thursday. Coincidentally, on Friday, a software company announced the news of entering the market on dips.

Earlier on Friday, the global business intelligence software giant MicroStrategy announced that, including fees, a total of US$10 million has been invested to purchase approximately 314 bitcoins, each worth US$31,808 on average. As of this Friday, the company held approximately 70,784 bitcoins, with a cumulative purchase price of US$1.135 billion, with an average purchase price of US$16.035 per bitcoin including fees.

Prior to this, Bitcoin had just fallen into a market panic involving double-spending transactions. After the U.S. stock market on Thursday, when Bitcoin broke a nearly three-week low, it had fallen by more than US$10,000 from the historical peak created by breaking US$40,000 in the first half of this month.

Regarding the slump of Bitcoin in the past two days, analysts believe that the panic in the market should stem from a blog post mentioning a suspicious double-spending transaction. The so-called double spend refers to two different spending transactions with the same bitcoin.

The blockchain supporting Bitcoin is theoretically immutable, helping to prevent fraud and making transactions irreversible. Double spending actually means that the Bitcoin blockchain has been manipulated, thereby obliterating Bitcoin’s pioneering security claims.

However, Bloomberg’s macro strategist Mark Cudmore later analyzed that the problem of double-spending transactions was in fact likely to be a delay in confirmation transactions, not true double-spending.

In any case, Bitcoin’s recent correction has caused some institutions to pour cold water.

Paul Donovan, chief economist at UBS, believes that digital currencies such as Bitcoin may never be used as real money. The inherent “fundamental flaw” of digital currency is that in most cases, if demand falls, digital currency cannot reduce its supply. Without a mechanism for the central bank to regulate supply, the value of digital currency will decline, and currency should be able to store value stably.

JPMorgan Chase analysts believe that in the recent surge, the momentum of Bitcoin’s rise has changed. Bitcoin is developing in sync with traditional cyclical assets and has gradually lost its hedging function. If this trend continues, Bitcoin will lose its value as a diversified investment object.

Jim Reid, a strategist at Deutsche Bank, pointed out that Bitcoin’s new high this month is only half the level of the Dutch tulip bubble in 1637. You may not need to worry too much about the bubble, but it shows some fluctuations similar to the major bubbles of the past 50 years. .