From “straight up to the sky” to “flying down”, the fanatical Bitcoin market began to cool down.
Continues the upward trend of 7 times from the lowest $4,000 in 2020. Since 2021, the Bitcoin market has risen from $30,000 at the beginning of the year to mid-April. The highest price was 64,000 US dollars, and the lowest since then fell below 30,000 US dollars. Now the price is around 33,000 US dollars. 
The irrationality of the mixed cryptocurrency market Prosperity is worrisome: celebrities shouting orders, altcoins skyrocketing, speculative fanaticism, and frequent frauds… Then, many countries have strengthened their supervision of digital currencies. In China, the regulatory hammer has been sounding one after another since May.
“Musk Effect” hits the face of “decentralization”
In the past six months of Bitcoin’s rise and fall, Tesla founder Ron Musk played a very light role.
“In the beginning, Musk started recommending Bitcoin, and I was quite excited.” A Bitcoin investment told a journalist that he had hoped that Musk could use his own The geek appeal to promote the public’s interest and awareness of Bitcoin and cryptocurrency.
Whether it’s changing the Twitter profile to Bitcoin, changing the avatar to the Bitcoin symbol, announcing that Tesla accepts Bitcoin payments, or “changing face” to compare Questions about Bitcoin mining energy consumption and “decentralization”, and even announcing that Tesla will stop Bitcoin payments, Musk’s multiple actions in the social public opinion field have caused Bitcoin shocks of 10% or even nearly 20%. , This phenomenon is even called the “Musk Effect (Musk Effect)”.
Musk also used his own power to take the playful cryptocurrency-Dogecoin. Dogecoin once reached around $0.722 on May 8, which is a 140-fold increase from the beginning of January. On May 9th, Musk claimed that Dogecoin was a “scam”, causing Dogecoin to plummet by more than 30%.
What is even more questionable is that while Musk has repeatedly spoken out, he is also buying and selling Bitcoin and Dogecoin.
On February 8th, Tesla announced that it had purchased $1.5 billion worth of Bitcoin, and then sold 10% of the Bitcoin within 2 months, with a profit of $101 million. Moreover, it took less than one month for Tesla to announce the acceptance of Bitcoin payments to stop. There are even more rumors that Musk is the largest holder of Dogecoin. Therefore, Musk and Tesla have gradually raised doubts about “market manipulation”.
“Musk’s behavior is suspected of actually manipulating the market. Using personal influence, frequently publishing news that can affect the market, and switching between long and short news Released.” The aforementioned Bitcoin investor expressed his disappointment with Musk. “Musk is not satisfied with having a certain influence on the price of Bitcoin, but is also trying to support a crypto that can be controlled by himself and can get huge benefits from it. The currency is in the top position.”
On June 18th, Musk denied Tesla’s manipulation of the market and said that if Bitcoin mining uses clean energy in the future, Sla will also resume Bitcoin payments.
Dong Ximiao, chief researcher of China Merchants Finance and part-time researcher of the Institute of Finance of Fudan University, and Lian Jing, a financial researcher of China Merchants Union, in the article “The Nature, Risks and Supervision of Virtual Currency” It is pointed out that there may be market risks in buying and selling or using virtual currencies such as Bitcoin, which means that the size of virtual currencies such as Bitcoin that enter the trading market is limited, which is easy to create an illusion of “exotic goods” for investors, and it is easy to be susceptible to a small number of institutional investors. Or personal influence and control.
Is Musk a prophet or a manipulator? Does this phenomenon of calling orders violate the “decentralized” nature of the cryptocurrency market?
Ren, an analyst who did not want to be named, told the news that this kind of “market manipulation” also exists in the stock market, just because of the transaction of Bitcoin itself. The amount is small and the liquidity is poor, so it is easier to control.
“Cryptocurrency is a distributed currency, and the market will not be controlled by one country or several institutions. Musk has a certain amount of traffic, which may affect public opinion, but The price of Bitcoin has been adjusted in a wide range, and he cannot influence it.” Sun Yang, a researcher at the Suning Institute of Finance, told the news.
Associate Professor Wang Zhicheng of the Guanghua School of Management of Peking University said in an interview with reporters: “It is a bit exaggerated to say that Musk manipulates the cryptocurrency market, but as an internet celebrity, he uses market mechanisms. And trends, it is appropriate to say that the market’s large volatility has been boosted. The scale of the market is far beyond what he believesThe amount of funds that can be used does not reach the level of manipulation. “
However, Yu Jianing, the rotating chairman of the Blockchain Committee of the China Communications Industry Association and the principal of Huobi Education, told the news that based on the current information, it is still impossible to judge the situation. Sk’s tweet is only an expression of personal opinion, or intentional market manipulation. He believes that professional institutions should come forward to investigate whether he has the intention of manipulating the market, and whether he or his stakeholders actually make a profit in this way.< br>
“If evidence of Musk’s deliberate manipulation of the market and profit is found in the future, Musk is likely to be punished by US regulators. There was a precedent for celebrities in the United States who were punished for “calling orders” for certain crypto assets. “Yu Jianing said.
Altcoins are skyrocketing, and frauds are still frequent
If Bitcoin’s rapid advancement has driven the investment boom in the cryptocurrency market, and Dogecoin’s ” “The brainless skyrocket” has intensified the speculative boom in altcoins.
Executive Dean and Professor Pan Helin of the Institute of Digital Economy, Zhongnan University of Economics and Law pointed out in the article “Breaking the “Crypto Circle” Myth of Getting Rich Overnight”, if It is said that people who held Bitcoin in the past two years more truly believe in the technical value of Bitcoin. Today, it is “worthless” at the technical level, and even Dogecoin, which was originally born to ridicule virtual currencies, can be crazy. The sharp rise can only show that the “consensus of getting rich” and “bossy mentality” occupy the “currency circle”.
After Dogecoin, various animal coins have become popular. Cryptocurrencies such as Shiba Inu, Piggy, and Gorilla have all experienced short-term skyrocketing and even overnight gains. “Magic scenes” reaching hundreds or thousands of times. For example, on May 11, the Shiba Inu coin rose by 300% overnight, and the altcoin CSPR rose by 1300 times overnight.
Compared with the already high-priced Bitcoin, these altcoins have a low base price and a small short-term increase. Therefore, many investors are crazy about speculation and “get rich”. Buy all kinds of altcoins. Yu Jianing pointed out that this type of speculative behavior is essentially financial anti-intellectualism, and mature investors should not fall into irrational speculation.
The above-mentioned investor told reporters that he had bought very few Dogecoins and sold them after making money, and he had never touched other meme coins that followed suit.
“Whether before the surge or now, my views on Meme coin are the same, that is, there is no investment value, only gambling speculative value, and as a speculative product, it has huge volatility and liquidity. Very bad. So for me, there is no value in participation. “He said.
In addition to transactions in the market, the use of endless altcoins and the psychology of getting rich, money scams under the banner of virtual currencies have also begun to appear constantly. .
According to a report on May 18 by the China Securities Journal, some trading platforms treat the elderly as “reap targets” and are suspected of pyramid schemes; there are trading platforms and “teachers with orders” “Cooperation, using technical means to damage investors; there are also trading platforms reduced to cross-border “money laundering” tools, evading foreign exchange supervision, etc.
not only in China, 7 According to the latest research of crypto education platform CryptoHead on the 1st, there were 82,135 cryptocurrency crimes in the United States in 2020, an increase of 240 times from the 340 reported in 2016. In 2020, Australia reported 9,689 crypto crimes, which is the value in 2016. Zero. There were 8801 crypto crimes reported in the UK in 2020 and 704 in 2016. According to the CryptoHead report, crypto frauds include ICO scams, cryptocurrency scams and crypto thefts.
How to supervise the influx of institutional funds?
Compared with previous rounds of Bitcoin bull market, since 2020, the entry of institutional funds has become a major feature of this round of bull market.
In addition to Tesla, many traditional financial institutions such as MasterCard and Bank of New York Mellon have also announced the deployment of Bitcoin in 2021. Faced with the investment needs of investors, Bitcoin ETFs (trading open-end index funds) began to appear. Only from February to March Canada approved 3 Bitcoin ETFs, which means that more public investors will have the opportunity to invest in Bitcoin currency.
Du Jun, the co-founder of Huobi Group, revealed to the news on April 13 that there have been 9 Bitcoin ETF applications in the US market. However, no application has been approved so far. According to a CNBC report on March 17, Morgan Stanley will open the authority of three Bitcoin funds to purchase Bitcoin.
The admission of institutional funds considered more rational seems toDid not alleviate the situation of Bitcoin’s skyrocketing and plummeting.
Wang Zhicheng said that in the relatively early days of the market, the volume was not large enough, and the volume and demonstration effect of institutional funds may actually lead to instability. Only when the institutions reach a certain number and scale and achieve dynamic balance and checks and balances between each other can stability be formed. Therefore, the stabilizing effect of institutional funds is not yet final.
In addition, the traditional financial industry has always been the focus of risk supervision. When financial institutions enter the cryptocurrency market, it also means that the scope of financial supervision will advance with the times and expand.
Li Bo, the deputy governor of the Central Bank, revealed at the Boao Forum in Asia on April 18 that many countries, including China, are studying how to use Bitcoin as an investment tool Although the regulatory environment may be a minimum regulatory rule, it is still necessary to have regulatory rules and to ensure that speculation in such assets will not cause serious financial risks.
The Basel Committee on Banking Supervision made a recommendation on June 10 that the bank’s exposure to Bitcoin and other cryptocurrencies should adopt the highest risk weight of 1250%. Under the 8% minimum capital requirement, banks may need to hold one dollar worth of capital for one dollar worth of bitcoin.
” From a security perspective, Basel’s proposal requires that only one’s own capital can be used to participate, and no borrowed funds can be used to participate. Leveraged funds.” Wang Zhicheng said.
Yu Jianing pointed out that, on the whole, the Basel Committee is very cautious about the supervision of encrypted assets. The proposal will cause banks to hold encrypted assets on the books. The cost has increased significantly, and the proposal has provided a reference for compliance supervision to a certain extent.
Bitcoin becomes legal tender? Alleged “short-term behavior”
On June 9, El Salvador’s President Nayib Bukele announced that Bitcoin has become the country’s legal tender.
This Central American country is one of the poorest countries in Latin America, and has been using the US dollar as its official currency since 2001. According to BBC reports, 20% of El Salvador’s annual gross domestic product (GDP) relies on remittances.Family members in China avoided the high cost of sending money home each month.
“El Salvador chooses Bitcoin as its legal currency, or has the purpose of propagating itself, to gain the attention of international crypto asset groups.” Wang Zhicheng previously told the news.
The above-mentioned analysts who did not want to be named also told reporters: “This is more of a gimmick and attractive short-term behavior.” He said that he would come to El Salvador. Said that it can improve the country’s reputation and bring in capital and manpower inflows.
The above-mentioned investors believe that for a small country, whether or not to support cryptocurrency is a business, not a belief, the key is to see which party gives the most benefits. In the current state, Salvardo’s support for cryptocurrency may be in its own interests.
Wang Zhicheng pointed out that the current stability of Bitcoin is too poor, the atmosphere of hype is too strong, the risk of unexpected impact on the market is not easy to control, and its function as a currency is still Some deficiencies, it is more suitable as a virtual commodity role.
Wang Yongli, former vice president of Bank of China and chief economist of Shenzhen Neptunus Group, pointed out in an interview with reporters that some countries lacking sovereign currencies lack the most basic currency According to the cognition of Bitcoin and other completely decentralized digital encrypted assets as legal currency, if its own price fluctuates and severely disrupts economic and social operations, the country has no means of regulation and can only find its own way.
“Bitcoin cannot be an effective payment tool. I believe El Salvador will realize this soon.” An unnamed financial expert once told a news reporter Said that Bitcoin can never achieve value stability and can only be a speculative alternative asset.
The global regulatory storm hits
In the face of the exuberant cryptocurrency market and the “magic scene” under irrational prosperity, except for some small countries who follow Bit Currency, the global regulatory storm has begun to brew.
” After this round of rapid growth, its size and operation mode have already allowed the regulators of various countries to prepare for regulations, hoping to guide them from a perspective that is beneficial to themselves And intervention.” Wang Zhicheng said.
The UK requested encrypted goods in JanuaryCurrency-related companies must register with the Financial Conduct Authority (FCA) before starting business in the UK. A senior Indian official revealed in March that it would introduce a bill to ban cryptocurrencies. The Central Bank of Turkey prohibits the public from using cryptocurrency and crypto assets to purchase and trade on the grounds that it may cause “irreparable” losses and transaction risks. South Korea will impose a 20% tax on the capital gains of cryptocurrencies as scheduled next year. The Central Bank of Mexico also recently announced that virtual currency is not its legal tender and it is forbidden to use it in the country’s financial system.
In China, strict supervision of virtual currencies has shown signs that Inner Mongolia cleared out virtual currency mining and blocked social media accounts on exchanges a few months ago. “It’s not a good sign that the microblogs of the three major exchanges have been blocked,” a person in the crypto industry once told a news reporter.
However, most people disagree with the arrival of the flood season in Sichuan and the unprecedented rise in the currency market before May. Some people are even optimistic that Bitcoin has got rid of the influence of regulatory policies.
However, following the May 18th meeting of the Financial Committee of the State Council proposed to crack down on virtual currency mining and trading, frequent regulatory policies have been accompanied by Bitcoin’s many sharp declines. The price of Bitcoin fell from a minimum of $43,000 below $30,000. The cryptocurrency market, which has been hot for nearly a year, has begun to “cool down.”
“China has begun to completely shut down the mining of virtual currencies such as Bitcoin, and requires banks and payment institutions to conduct a comprehensive investigation and identification of virtual currency exchanges and over-the-counter traders’ funds Account, cut off the transaction funds payment link in time, which not only shows that the preliminary work has not met the expected requirements, but also shows the country’s determination to halt virtual currency in an all-round way-virtual currency has almost no legal space in China!” Wang Yongli said.
Wang Zhicheng believes that the current global regulatory trend should be to gradually establish a corresponding relationship with traditional assets, while at the same time adapting to the characteristics of virtual assets. And the model is still in the exploratory stage. Eventually, with the continuous development of regulatory technology, an effective restriction mechanism may be embedded in the current system to achieve compliance.
“The current global regulatory trend is obviously becoming stricter, especially for Bitcoin, Ethereum and various emerging animal currencies, especially for major economies More strict supervision.” Sun Yang said.
But he also pointed out that compliance in the cryptocurrency market is very difficult, because the essence of cryptocurrency is to go to the central bank, even without government and borders, andAnd the main body of the cryptocurrency market is thousands of hackers and grassroots people. 