While supporters are still looking forward to Bitcoin's price increase, it has reached its lowest point of the year of $29,000
When users who support Bitcoin are still expecting that Bitcoin will rise against the trend, Bitcoin has given them a head-on. Bitcoin quickly dived on June 22, hitting a key point of $29,000, and has reached the lowest price of the year. In the past few days, China’s policies against Bitcoin have been intensively promulgated, including measures such as closing Bitcoin mines and restricting financial institutions from providing services to Bitcoin users. In fact, they are all clearly unfavorable information for Bitcoin. However, many people do not think that China has the ability to influence the direction of Bitcoin. The reason is that Bitcoin is a globalized cryptocurrency system.
To be honest, due to the special design of Bitcoin, the attitude of a single country is indeed difficult to influence the direction of Bitcoin, but it is only difficult. China is a country with a population of 1.4 billion. For any product, it is a huge consumer market. If China completely bans one thing, then this product will lose a huge market, including Bitcoin and other cryptocurrencies. Without the support of the Chinese market, the value of Bitcoin must be greatly discounted, and devaluation is a matter of course.
Of course, because Bitcoin is now highly held by capital giants, if someone wants to take the opportunity to short Bitcoin, then I can only say that it is clever instead of being clever. Bitcoin itself does not generate value. Its value mainly comes from the support of incremental funds, such as the emergence of new retail investors. But there is also a special motivation, which is to harvest the gambling funds of contract users. Bitcoin is a technical job. Although Bitcoin is currently on a downward trend, if someone wants to take the opportunity to make a fortune, there is a high chance that it will be harvested by capital giants.
When you are still supporting Bitcoin, institutions are already selling high arbitrage
If the United States can clearly support Bitcoin regardless of the consequences, then Bitcoin will remain strong, otherwise Bitcoin will definitely enter the downward channel. However, when discussing this issue with netizens in the past few days, I found that there are still many Bitcoin supporters who believe that China's ban on Bitcoin is good news for Bitcoin. To be honest, when you are still supporting Bitcoin, some foreign capital giants have already started to sell Bitcoin in their hands.
I think users who follow Bitcoin should know that Bitcoin's rising market from December last year to April this year was mainly supported by institutional users. The entry of institutional investors is conducive to the long-term stability of Bitcoin, which should be interpreted as positive news for Bitcoin. However, from the data provided by CoinShares, funds dedicated to Bitcoin hype have experienced capital outflows for six consecutive weeks. This means that the institutional account has a profitable exit behavior.
Of course, these Bitcoin whale accounts, even if they sell part of the Bitcoin, they still have a large amount of Bitcoin in their hands. But don't forget one problem, that is, they open positions earlier, which makes their comprehensive holding costs very low. Especially in the past few months, buying low and selling high has given them enough confidence to bear the pressure of Bitcoin's depreciation. I personally think that even if it drops to $20,000, it will not affect their profitability. Therefore, retail investors who sell at this price are likely to become targets for capital giants.
In your eyes, is Bitcoin the future currency system or a gambling tool?
Many people's understanding of Bitcoin has seriously deviated from the established trajectory. The establishment of a consensus system is a key element of Bitcoin's development. If someone recognizes and supports Bitcoin, Bitcoin can continue to develop. But we don’t seem to have a consensus on the definition of Bitcoin. I really want to know what Bitcoin is in your eyes?
I remember that Satoshi Nakamoto designed Bitcoin because he wanted to solve the problem of devaluation of traditional currencies and to protect people’s property through technical means. But now speaking of Bitcoin, many people are discussing whether to buy up or down, or even just add leverage to make a gamble. If I say that Bitcoin is a gambling tool, you are definitely not happy, and you will say that Bitcoin is the most valuable cryptocurrency system in the future. But in fact, you are using Bitcoin's gambling table principle to bet against each other on the future trend of Bitcoin, giving full play to the characteristics of Bitcoin that can be hyped.
Some people even insist that Bitcoin is risk-free. The current price drop is only temporary, and there is a chance to exceed $100,000 in the future. From a high of $63,000 in April, Bitcoin has now fallen below $29,000, a drop of more than 50%. If this is not considered a risk, then I really don’t know what your definition of risk is? Bitcoin has deviated from the main line of preventing property devaluation and has become a high-risk financial management tool, or it is more suitable for gambling tools.
The risk of investing in Bitcoin is very high, and ordinary users are not recommended to participate in it. Many people think that they have the ability to harvest Wall Street capital giants through Bitcoin, but in fact most of them only have the ability to make leeks.
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