After breaking through the $20,000 integer mark on December 16, Bitcoin rose to $24,188 per coin on the 20th, setting a record high again.
Under the skyrocketing, it attracted the attention of many mainstream media. On December 17, CCTV's financial channel "Zheng Dian Finance" reported that Bitcoin has completely recovered from the three-year bear market. The analysis pointed out that the impact of the epidemic and the surge in safe-haven demand under the opening of the global monetary policy are important drivers of Bitcoin's recent surge.
Mati Greenspan, founder of Quantum Economics, recently said that although Bitcoin exceeds $23,000 per coin, this does not necessarily mean that the market is "overheated" and will head for a crash like in December 2017. In his view, we should not use any old standards in the face of possible growth.
On the other side of Bitcoin's bullishness, the currency community has not seen the madness comparable to the last round of bull market. Obviously, this is not the same as the "bull market" that most people in the currency circle imagined: many investors in the currency circle clamored that "Bitcoin does not talk about martial arts"; the proportion of institutional holdings continued to rise, and retail investors lost a lot of chips; After the dry season, the mine's power consumption becomes tight or even cut off.
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Bitcoin starts a new upward cycle
On December 17, 2017, according to data from Huobi Global, Bitcoin rose to as high as $19,875 per coin on that day, setting a high point in this round of bull market.
Three years later, on December 16, 2020, Bitcoin continued to rise sharply after breaking through the $20,000 integer mark, hitting an intraday high of $24,188 per coin on the 20th. Compared with the new low of 3,800 US dollars per coin on March 13, the price of Bitcoin has soared by more than 536%.
"Bitcoin's break above the $20,000 mark is not surprising because the asset is still in its infancy," said Michael Sonnenshein, managing director of Grayscale Investments. Sex Threshold" is appropriate.
Liu Feng, director of the Blockchain Technology and Application Research Center of the Institute of Artificial Intelligence and Change Management, Shanghai University of International Business and Economics, said in an interview with the media that in the short term, it is mainly due to the large-scale entry of institutions to continue to support the bottom line to absorb the gains in the market. Lipan continued to buy the original callback chips, accumulating several weeks of "energy" for this breakthrough; from a medium-term perspective, the technical landing of Ethereum 2.0 and market expectations are also one of the main forces for breaking new highs; In the long run, the big cycle expectations of previous bull markets have also made many people in the currency circle have more expectations at this critical time node at the end of the year.
He believes that as the price of Bitcoin continues to hit new highs, avid investors have entered a FOMO state, which also makes the risk of a callback more and more high.
At the same time, according to data from Alternative.me, the panic and greed index on December 16 and 17 was 92, setting a new high for the year. It should be pointed out that the market has been "extremely greedy" for a month.
In addition, it is worth mentioning that in the skyrocketing price of Bitcoin, short sellers suffered a lot of losses. According to the data of Contract Emperor, the total liquidation of the entire network on December 16 and 17 reached 1.222 billion U.S. dollars, of which the amount of liquidation by short positions exceeded 1 billion U.S. dollars.
However, due to the impact of the international situation, the new crown epidemic, and the economic downturn this year, Bitcoin still has a strong upward trend, and investors are generally optimistic about the market outlook.
Analyst Tina believes that there is no pressure on Bitcoin at present, and a new accelerated upward trend has begun.
Jiang Zhuoer, CEO of Leibit Mining Pool, wrote that from the perspective of the four cycles in the history of Bitcoin, the "increase/time" of this round of bull market (purple line) and the previous round (green line) are basically the same, which is currently equivalent to January 2017 of the last round.
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The first institution "Changniu" is on the way
Since April of this year, there have been endless voices of institutions participating in and boosting the rise of Bitcoin.
On December 1, Mint, the founder of Wonderful Mine, said in an interview with Jiemian News that the domestic currency holdings are decreasing sharply. "Taking mining farms as an example, they are shifting to countries and regions with more cheap power resources. Previously, the mining industry was mostly distributed in Sichuan, Yunnan, and Inner Mongolia, Xinjiang during the dry season. Now it is moving to Outer Mongolia, Canada, Iceland and the Middle East," she said. .
She believes that the bargaining power of Bitcoin was first in the hands of miners, and more than 80% of the mines are in China. Later, the futures market had the right to speak, but after the frequent liquidation of the futures market, most users lost their bargaining chips. Today, Bitcoin has ushered in the entry of institutional users represented by Wall Street institutions. When a limited amount of Bitcoin is attracted, the bargaining power is likely to transfer from China to Wall Street.
According to the Nuclear Finance APP, since the beginning of this year, many investment institutions and listed companies, including the Bitcoin Trust Fund (GBTC) managed by Grayscale Fund, the US software giant MicroStrategy, the mobile payment giant Square and Galaxy Digital, have become more and more frequent.
According to the statistics of the Bitcoin Treasuries website, as of 16:00 on December 20, 27 listed companies and investment institutions around the world publicly held 953,190 bitcoins. Calculated at US$23,700 per coin, the current value is about US$22.6 billion.
On December 19, according to data disclosed by Grayscale on Twitter, its total assets under management increased by US$2.5 billion in the past three days. On December 15, the total scale of gray scale assets under management was US$13 billion; as of December 18, this figure had risen to US$15.5 billion.
"Looking at the current holdings of these overseas institutions, the actions of any one can affect the currency price, and the lower the liquidity, the easier it is to affect the price." Mint said.
Song Jiaji’s team from the Guosheng Securities Blockchain Research Institute also stated that unlike 2017, an important feature of the bitcoin boom in the past two years is the participation of more institutions. Song Jiaji's team believes that the participation of these institutions may directly boost the transaction volume of the "secondary market" of Bitcoin, especially GBTC, which has been continuously buying Bitcoin since its establishment, which is also the reason for pushing Bitcoin to a new high .
Industry analysts believe that the shift of the main force of market investment from individual investors to institutional investors is the reason for the large fluctuations in Bitcoin. At the same time, the continuous buying of institutional investors will further amplify the enthusiasm in the market.
"The market at the current stage is a clear sign of 'long bull' from Western institutional investors." On December 19, Wan Hui, founding partner of Primitive Ventures, said at an event that she divided institutional investors into three categories, one It is a speculative institution, focusing on short-term income, transaction-oriented, and liquidity is king; the second is an investment institution, focusing on medium-term income, trend-oriented, and legal currency-based income; the third is an allocation institution, focusing on long-term income, oriented by value storage, Bitcoin will become increasingly less correlated with other dollar-denominated assets.
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Electricity shortage accelerates mining reshuffle
The myth of Bitcoin is still being staged, but unfortunately, in addition to retail investors, many miners have also been turned away.
Recently, the Nuclear Finance APP learned from several mines in Sichuan that due to the shortage of electricity due to the dry season, Sichuan has imposed mandatory requirements on cryptocurrency mining, which has made most mines very tight in power consumption, and even many mines is powered off.
On November 22, the Sichuan Provincial Economic and Information Technology Commission pointed out in the notice on the production and supply of electricity during the dry season of this winter and next spring that the maximum power load of the province's main grid is expected to be 26 million kilowatts during the dry season of this winter and next spring, and the average daily power consumption The volume is about 410 million kwh. However, due to the greater impact of temperature changes on heating loads, it will cause severe fluctuations in electricity loads. At the same time, affected by factors such as power coal supply and possible extreme weather, the guarantee of power supply still faces greater uncertainty. The notice requires that a local power distribution plan be formulated in accordance with the principle of limited guarantee.
According to Wu Shuo’s blockchain report, a recent notice from a mining company stated that Sichuan Province requires all hydropower stations to stop supplying power to big data centers from December 8.
According to Tokenview data, the computing power of Bitcoin’s entire network dropped significantly in November compared with October. Although the computing power of the entire network has picked up in recent days, further observation is needed. Industry insiders believe that this may be related to the soaring price of Bitcoin, causing some computing power to switch to Bitcoin for mining.
Zhu Wei, the co-founder of Coinin Mining Pool, said that mining is a heavy investment, long-term, and high-risk business, and it is currently moving towards scale and specialization. The implication is that small miners have weak anti-risk capabilities, and their only way out may be to buy cloud computing power or cloud mining machines.
Not only that, but according to The Block, as the price of Bitcoin breaks through $20,000, the bidding war for the top ASIC mining equipment is heating up again.
Since early December, Bitmain has increased the pre-order price of its flagship S19 series by 20%, and the miners will not ship until next June. Some users who pre-ordered the January 2021 batch three months ago are now trying to resell the soon-to-be-received Bitmain miners at a premium of 75% to 90%. Additionally, Bitmain’s main competitor, MicroBT, said it has yet to release pre-orders for the next batch of its flagship WhatsMiners, but expects to adjust prices to match Bitcoin’s recent price gains.
According to news from the Financial Associated Press on December 17, the price of graphics cards has continued to rise since October, and the price of GTX1660Super models has soared from about 1,400 yuan to 2,000 yuan. Hu Shubin, co-CEO of Asustek, the world's top two graphics card brands and PC brand maker, confirmed on the 16th that it is estimated that the shortage of components will last until the first quarter of next year, and the deferred demand is expected to continue until the first half of next year.
