More and more tech tycoons end up calling for Bitcoin.
Editor’s note: This article is from the micro-channel public number “deep burning” (ID: shenrancaijing), Author: Wei Jie, Editor: Dawn.
Don’t laugh, we are not crazy, there are really many people who think that Bitcoin was invented by Musk.
To blame, I can only blame Musk for calling Bitcoin too hard. Now Bitcoin and Musk have formed a deep bond. With the voice of a traffic guy like Musk, Bitcoin today is no longer a small circle. game. More and more retail investors entered the market, and Bitcoin broke the circle.
Recently, news about domestic entrepreneurs investing in Bitcoin has gradually become intensive. On the evening of March 7, Meitu announced that it had purchased about 260 million yuan of Bitcoin and Ether (a cryptocurrency second only to Bitcoin in market value). Prior to this, on the evening of February 19, Dan Bin, a domestic private equity tycoon and chairman of Oriental Harbor, publicly stated that he would buy Bitcoin ETF funds.
There are also voices who pointed out that some domestic and foreign bigwigs who have flown out of the market because they invested in Bitcoin will let ordinary people follow up and follow suit, and the fluctuating characteristics of such assets will eventually make many ordinary people lose money and hurt. .
Who is hyping Bitcoin? Is the rise and fall of Bitcoin related to the speeches of these traffic leaders? What are the risks after Bitcoin breaks the circle? Shen Burn takes you to find out.
01 Those who make money from Bitcoin
Since the second half of 2020, the price of Bitcoin has continued to rise, and the skyrocketing market has made Bitcoin out of the circle. More and more ordinary people are trying to use Bitcoin as an investment method.
According to information released by Bitcoin broker Binance, the number of institutional accounts opened by the company in 2020 has soared by 46%. Benefiting from the bull market of Bitcoin, the cryptocurrency market has attracted a large number of retail and institutional funds to open accounts.
The top cryptocurrency exchange Coinbase recently submitted a listing application to the SEC, stating that from 2018 to 2020, the authenticated individual users on the platform have shown a quarterly growth trend. After entering 2020, this growth trend will be further Obviously, this is also closely related to the increase in the price of Bitcoin and the increasing interest of more and more people in Bitcoin investment.
In 2017, a class of “Technology and Law” was an elective course of law students and friends, which talked about legal precedents involving Bitcoin. Later, he learned that Bitcoin was not an officially recognized currency in China at the time, but the court still recognized the value of Bitcoin. “There is a debtor who only has bitcoins and no other assets. After he owes debts, the court will execute the payment of his bitcoins to his creditors.”
Guyyou Xiang Shenran said that even the legal industry needs to face the changes brought about by Bitcoin. Perhaps Bitcoin will have a lot of value in the future, so he bought 6,000 yuan of Bitcoin. The price of Bitcoin is less than $10,000Yuan, he has not invested in stocks or funds before. “I bought it in the summer, and then Bitcoin plummeted that winter. I had a bad mentality. I felt that I couldn’t hold it anymore and wanted to sell it. Then I comforted myself. I watched so many law, science and technology, etc. Philosophy books have a thorough understanding of the value of Bitcoin, and you should trust your own judgment.”
At that time, many people would laugh at him about Bitcoin, “Look, I’ll tell you that it was a lie and cut your leeks.” He wasn’t convinced, but he didn’t have the confidence to argue, so he could only hold the Bitcoin silently without throwing it away. Until now, the bitcoin in his hand is worth about 30,000 yuan.
The mantis who works in an Internet company, the money he received when he got married in 2018 was Bitcoin. On the day of the wedding, a friend who worked on the exchange went through the accounting desk and reported the sentence-“1.1314 Bitcoins”. After that, the friend asked him to register a digital wallet himself, and after the registration was successful, he told him the payment address and transferred 1.1314 bitcoins to his account.
At that time, air coins were prevalent (currencies used for the purpose of issuing coins and circling money), and Langlang’s perception of such virtual currencies was neutral and negative. He just kept Bitcoin as a wedding gift, and didn’t want to know more about it. “When the fund soared in February, he also thought about whether to sell Bitcoin to buy a fund, but he thought that this is a gift after all, which makes more sense. It was not sold.”
However, Mantis told Shenran that he did not plan to invest in Bitcoin because he “does not make money beyond his own knowledge.”
Different from the above-mentioned people who came into contact with Bitcoin from buying and selling, Xiong Baiqiang, who is engaged in the electric power industry at home, sniffed the “business opportunity”-mining, which is based on a specific algorithm program, to obtain a certain amount of virtual currency. The most important cost of virtual currency mining is electricity. So he came up with the idea of a power plant without Internet access, mainly using hydropower and wind power in Inner Mongolia. However, because this action was in a gray area of the law, it did not continue under the persuasion of his family.
Recently, the term mining has frequently appeared in people’s sight. On February 25, the Inner Mongolia Development and Reform Commission issued a document stating that it intends to completely clean up and shut down virtual currency mining projects. Due to the need to operate machines 24 hours a day, many “mining” companies choose places where they have cheap coal-fired electricity. Inner Mongolia has abundant power resources and a large area with sparse population, which can support large-scale mining farms and become Bitcoin mining. Popular choice for mines.
According to the Bitcoin Power Consumption Index compiled by the University of Cambridge, China currently accounts for about 65% of all Bitcoin mining computing power in the world. Inner Mongolia alone accounts for 8%, while the United States only accounts for 7.2%.
At the same time, #韩近两成网吧关门闵矿# is on the hot search. Take a South Korean Internet cafe with 200 computers as an example. It can make a profit of at least RMB 5,800 from “mining” for 15 hours a day, which is much higher than the usual operating income of many Internet cafes.
Source / Weibo screenshot
02 Who is buying and selling bitcoin frantically?
Among the big players who invest in Bitcoin, Musk is undoubtedly the most happy one. Searching for Bitcoin and Musk on Baidu, the first question that pops up is even: Is Bitcoin invented by Musk?
Source / Baidu screenshot
Since the end of January, Bitcoin and Musk have forged an indissoluble bond, and there is even an illusion that Musk’s mouth can affect the rise and fall of Bitcoin.
On January 29, Musk changed the profile of his Twitter account to “bitcoin”. The price of Bitcoin rose by more than 18%, and the price was once reported at $32,758 per coin. Musk also said in Clubhouse, “I am a supporter of Bitcoin. I should have bought it 8 years ago. I am late for this feast.”
On February 8, Musk announced that Tesla had bought $1.5 billion worth of bitcoin and would accept bitcoin as a form of payment in the future, causing bitcoin to rise wildly to $47,000.
Daniel Ifors, an analyst at the US investment bank Wedbush, believes that Musk has come forward to influence Bitcoin. After Tesla invested in Bitcoin, the two sides have clearly formed a binding relationship. “Forbes Magazine” data also shows: Bitcoin and Tesla have a strong correlation of 0.615. Tesla’s stock price has also fluctuated with the rise and fall of Bitcoin.
“Musk will be on the throne of the world’s richest man in 2020, and his influence is greater. His statement has attracted attention to Bitcoin, but more importantly, Tesla bought Bitcoin with real money. This kind of behavior is more helpful for pushing up the price of the currency,” said Cheng Zhipeng, head of the Huobi Research Institute, to Shenran. The so-called bigwig’s statement is only a temporary appearance, and what really depends on is the actual action behind it. For example, although Bill Gates has previously said that he is not optimistic about Bitcoin, Microsoft’s store supports Bitcoin payment as early as 2014, and that is still in Bitcoin.It is still in the early stages of development.
Big guys do have inconsistencies in words and deeds. For example, Jamie Dimon, CEO of JPMorgan Chase, once wrote that Bitcoin is a fraud. In September 2017, shortly after the criticism was published, JPMorgan Chase bought a large amount of Bitcoin at a low price of $3,000.
In China, in September 2017, Chinese regulators required domestic Bitcoin exchanges to formulate a risk-free withdrawal plan, which should be closed before the end of September. The official attitude determines the subtle status of Bitcoin in the country. Public figures are also cautious about their remarks about Bitcoin, and they rarely disclose their own Bitcoin holdings.
The first Internet tycoon who expressed appreciation for Bitcoin in a small range may be Wang Xing, the founder of Meituan. “I am also a person with Bitcoin, and I must use practical actions to pay tribute to this extraordinary imaginative creation.” On December 22, 2013, Wang Xing recorded his feelings of buying Bitcoin on Fanfou and expressed Recognition of Bitcoin.
Recently, news about domestic entrepreneurs investing in Bitcoin has gradually become intensive.
On the evening of February 19th, Dan Bin, a domestic private equity tycoon and chairman of Oriental Harbor, publicly stated that he bought a Bitcoin ETF fund, accompanied by Sla allows Bitcoin to be used as a payment currency, and its value may be enhanced” and other remarks.
On the evening of March 7, Meitu issued an announcement stating that the company purchased 15,000 units of Ether and 379.1214267 units of Bitcoin in open market transactions on March 5, 2021, the total of these two cryptocurrencies. The considerations were approximately US$22.1 million and US$17.9 million, which means a total of US$40 million (approximately 260 million RMB).
After the news was announced, Meitu Chairman Cai Wensheng stated in his WeChat Moments, “There must always be someone who eats crabs first. This should be regarded as the first Hong Kong listed company to buy Bitcoin and the world’s first listed company. The company uses Ethereum as a reserve of currency value.”
Source / Screenshot of Cai Wensheng Moments
In fact, starting from 2020, US financial institutions have begun to enter the digital currency market on a large scale, and institutional entry is an important reason for the explosion of Bitcoin.
Cheng Zhipeng said that Bitcoin’s rise is mainly due to the massive inflow of institutional funds. Since the outbreak of the new crown epidemic in 2020, global central banks have released water, but the general environment is limited byThe epidemic has made it difficult for funds to stimulate the economic cycle objectively, so they flowed into the capital market and pushed up asset prices such as stocks and commodities. The rise of Bitcoin also benefited from this. Many retail investors are reluctant to enter the market because of the high price of Bitcoin. The main thing that pushes up the price is institutional funds. Most retail investors just watched the excitement in the process. As Bitcoin has now begun to show a trend of new tools for gaming between mainstream finance and even international geopolitics, the influence of retail investors in the Bitcoin market will gradually diminish as the Bitcoin consensus expands and the market scale expands.
During August and September 2020, MicroStrategy, a Nasdaq-listed company, invested a total of US$425 million in Bitcoin. In late October, the US payment platform PayPal announced that it would allow users to buy, sell, and hold digital currencies such as Bitcoin through its online wallet, and from the beginning of 2021, its users can also use digital encrypted currencies for shopping.
Cheng Zhipeng believes that traditional financial institutions have aggressively entered the Bitcoin market and changed the structure of the Bitcoin market, and subsequent cyclical changes may show new laws.
03 Is Bitcoin cutting leeks?
“I have extreme contempt for the behavior of some big figures at home and abroad who have started to scream and instigate because they invested in Bitcoin or other digital currencies. This behavior is very irresponsible. Because of their every move, investment behavior Many ordinary people will follow suit, and the fluctuating nature of this kind of assets will eventually make many ordinary people lose money and hurt, and for them, the price is very intuitive and tragic.” On February 23, the founding of Matrix China Managing partner Zhang Ying expressed on Weibo his concern about some bigwigs getting off the platform Bitcoin.
Some people compare Bitcoin to a 24-hour casino and an unregulated financial trading market. People can increase leverage at will, and human greed is also infinitely amplified.
On December 16, 2020, the “Star Bay Bridge Jumping Case” was a sensation, and the cause of this tragedy was the investment in Bitcoin, or the greed of Bitcoin investors. Because of the early admission, Zheng obtained nearly 10 million assets by investing in Bitcoin after graduating from university. Later, due to the huge fluctuations in the price of Bitcoin and Zheng’s leverage operation, he lost a total of more than 20 million. Unable to bear the huge loss, Zheng killed his daughter and committed suicide by jumping into the sea with his wife. In the end, Zheng was rescued and prosecuted by the Dalian City prosecutor for “illegal deprivation of other people’s lives, causing one person to die, and suspected intentional homicide.” .
“Ordinary people investing in Bitcoin is the same as making all investments. They need to have a sufficient understanding of the object of the transaction. Bitcoin is a risky asset with high volatility. If the risk appetite is relatively low and cannot withstand huge fluctuations, be cautious. Participate in such a subject.” Cheng Zhipeng said.
Source / Unsplash
In addition, Bitcoin itself may also be used by criminals as a tool for money laundering.
One day in 2015, Xiaoli opened the office computer and found that all the files on the desktop could not be opened normally. He clicked on a table-like icon, which was an English email, saying “Your computer is locked, all files I can’t open it, but it’s not damaged. If I want it, pay 3 bitcoins.” I wrote in the email how to buy bitcoins.
Xiao Li recalled to Shen Ran that he didn’t know what Bitcoin was at the time. He asked a classmate who studied computer security to find out that it was a virus in the computer. At the suggestion of his classmates, he reinstalled the computer, but did not redeem the files. At that time, he knew for the first time that Bitcoin was a favorite payment method for criminals.
Bitcoin’s anonymity, borderlessness, and peer-to-peer payment objectively shorten the link of criminal transactions and increase the difficulty of investigation. In October 2020, the police in Wenzhou, Zhejiang detected a drug trafficking case using Bitcoin. The police said that in order to evade detection, criminals conduct transactions through virtual currency transfers.
Another potential risk factor for Bitcoin is its creator, Satoshi Nakamoto. Satoshi Nakamoto mined 1 million coins in the early days. At the current price of $54,000 per coin, Satoshi Nakamoto is worth about 54 billion U.S. dollars. Wang Xing said on Fanfou that in theory, Satoshi Nakamoto is already the world’s richest man. “A friend is firmly optimistic about Bitcoin. He believes that there is only one risk. If Satoshi Nakamoto is still alive, and someday he really jumps out (by moving a pile of Bitcoins that have been silent for ten years) to verify his body, then Bitcoin May be destroyed.”
Interestingly, in the prospectus of Coinbase, “the true identity behind Satoshi Nakamoto, the anonymous creator of Bitcoin and the transfer of Bitcoin by Satoshi Nakamoto” are also listed as risk factors.
The implication is that a major feature of Bitcoin is decentralization, and the quiet Satoshi Nakamoto has become the biggest center and turbulence factor of Bitcoin.
*The title picture comes from Unsplash. At the request of the interviewees, Guiyou, Langlang, Xiong Baiqiang, and Xiaoli in the text are all pseudonyms.