Bitcoin prices are hovering around $11,724, which means that in just three weeks this year, bitcoin prices have continued to fall from the year's high of $17,090, a drop of more than 31%. In the meantime, bitcoin prices once hit a low of $9280.3.
However, there are not many investors who choose to leave.
"Now, in addition to the United States, South Korea, and Japanese aunts who have been involved in the pursuit of the loss, many professional investors prefer to stay behind." A person in charge of a domestic bitcoin trading platform told the 21st Century Business Herald. The reason is that these professional investors mainly come from the IT and financial fields. On the one hand, their cost of holding coins is generally low. This round of bitcoin price has not touched the cost of their positions, which is enough to ensure that they continue to stay; on the other hand, they have previously It has also experienced the turmoil in financial markets such as the subprime mortgage crisis in 2008, and has a comprehensive understanding of the risk of large fluctuations in bitcoin prices, and it is not easy to chase up and fall.
The reporter learned from many sources that these investors even laid out the bottom bitcoin.
Tom Lee, co-founder of Fundstrat Global Advisors and former chief equity strategist at JP Morgan Chase, admits that he is a radical investor who buys bitcoin on dips. In his view, Bitcoin has a price volatility law that will inevitably skyrocket after the plunge, so he believes that bitcoin prices will at least double at the end of 2018, reaching $25,000.
In the view of a senior partner of a global new financial industry fund, although Tom Lee's estimate is rather "exaggerated," the commercial application of Bitcoin may still expand.
“However, even though Bitcoin is becoming more and more widely used, its journey to become the mainstream payment settlement investment currency is still long. In addition, the encryption digital currency such as Bitcoin has large price fluctuations and strong speculative atmosphere. The global financial regulatory authorities still tend to adopt Strict regulatory measures have led to a significant increase in the risk of Bitcoin investment.†A US investment banker bluntly told 21st Century Business Herald. In addition, the increasing number of encrypted digital currencies is increasingly weakening the investment value and scarcity of Bitcoin, which makes the future appreciation of Bitcoin more uncertain.
Exiter and left-behind
In the eyes of the industry, bitcoin prices have fallen more than 30% this year, which is closely related to financial supervision.
On the one hand, the US Treasury Department's Financial Stability Regulatory Commission (FSOC) has set up working groups for virtual currencies such as Bitcoin to assess its risks to investors and the possible negative impact of such assets. On the other hand, the European Financial and Markets Authority (ESMA), the European financial regulator, said it is studying whether digital currency-based CFDs (a type of CFD, a complex financial product that tracks the underlying asset price) are financially regulated. Tools, if ESMA believes that Bitcoin CFDs are financial derivatives, they have the right to ban their violations.
According to the market, in view of the volatility of encrypted digital currency financial instruments such as Bitcoin, European regulators are studying whether to impose stricter leverage limits (2:1 or 1:1) on such products, and even prohibit product marketing. In addition, ESMA is considering a total ban on the issuance of digital currency-based CFDs.
At the same time, financial regulators such as South Korea, India, and China have also strengthened the supervision of over-the-counter and derivative transactions in encrypted digital currencies such as Bitcoin. For example, South Korea will impose a high tax rate of 24.2% on encrypted digital currency exchanges, thereby controlling the size of encrypted digital currency transactions such as Bitcoin, and promoting the real name system of traders, blocking the dark passage of bitcoin for cross-border transfer of assets; Bank of India The suspension of trading on the top ten local Bitcoin exchange accounts was due to the bank's belief that there were suspicious transactions in these accounts, and the Indian tax authorities were also planning to tax the encrypted digital currency investors.
"This has also led many US, Japanese, Japanese and Korean aunts to stop and leave the market." The head of the domestic bitcoin trading platform said. After all, these aunts who are involved in bitcoin investment are frequent visitors to foreign exchange investment, and are extremely sensitive to any policy. Once they find that the policy is going to be bad for bitcoin price, they will quickly clear the bitcoin position and avoid the risk, resulting in bit. The currency has suffered a large decline this year.
In the eyes of many bitcoin professional investors, these aunts stop and fall off, just the appearance - the deeper reason for the recent sharp adjustment of bitcoin prices, is that some people sell bitcoin to lower the spot price of bitcoin. Thus, the futures market is short-selling.
On December 11, last year, the Chicago Board Options Exchange (CBOE) Bitcoin futures was officially launched, and January 17, 2018 was the expiration date of the first bitcoin futures contracts.
To the surprise of the market, the CFTC data showed that as of the week of January 9 (the week before the expiration of the Bitcoin futures contract), speculative shorts in the CBOE bitcoin futures contract suddenly prevailed, and the speculative headroom of the bitcoin futures in the week The warehouse increased to 1907 contracts, during which the bitcoin price once fell to around $9000.
In addition, most of the volume and open positions were concentrated in early January, indicating that the bears quietly established a large number of short positions in the futures market in January, waiting for the price to fall and the contract to expire, and to take a huge profit. In the end, bitcoin prices have fallen more than 30% this year, making them earn a lot of money.
Behind this is the high concentration of Bitcoin positions, which makes it easy for individual capitalists to hold large amounts of Bitcoin to manipulate prices.
According to Aaron Brown, chief risk officer of hedge fund AQR Capital Management, about 1,000 people hold 40% of the global Bitcoin, which is equivalent to an average of about $100 million in bitcoin per person at current prices.
"More importantly, these 1,000 people are basically the earliest bitcoin investors. The cost of holding positions is extremely low. Once they think that the price of Bitcoin approaching $20,000 has exceeded their earnings expectations, they decided to use the bitcoin futures market rallies. The short-selling huge gains, its huge selling volume can help them easily achieve this short-selling profit target, and do not have to worry about the risk of being forced into the air," Aaron Brown told reporters.
However, this does not “scare†most of the Bitcoin professional investors.
Many reporters in the 21st Century Business Herald learned that after the bitcoin price fell below $10,000, many IT and financial practitioners ran into Bitcoin, which helped push Bitcoin back above $11,000.
The reason why they dare to contradict the bitcoin against the trend is to be optimistic about the safe-haven investment value and business operation prospects of Bitcoin. For example, the US government was forced to “close the door†due to internal differences, which caused the price of Bitcoin to soar by 8%. More and more multinational companies began to explore the use of bitcoin in more specific scenarios to improve the efficiency of cross-border payment settlement, so that Bitcoin has more application scenarios and demand; on the other hand, their original average position cost is lower, even at this time. Bottom-hunting, there is also a higher "safety pad" against price volatility to ensure the security of the principal.
The heads of the above-mentioned domestic Bitcoin trading platform pointed out that although these professional investors are generally optimistic about Bitcoin, their trading strategies have quietly changed with the sharp fluctuations in prices – compared to their previous insistence on long-term holding of value investments, many investments nowadays. The person began to choose high throw low suck. The reason is that the rise of more and more digital cryptocurrencies diverts the investment value and scarcity of Bitcoin, which limits its future gains. Second, the government strictly regulates encrypted digital currencies and makes them realize that many of their investments are profitable. The logic may not be honored in the short term.
High leverage investment risk
Many reporters from the 21st Century Business Herald have learned that many US, Japanese, Japanese and Korean aunts have been forced to stop their losses during the recent ups and downs of bitcoin prices. There is also a last resort that is the risk of a high-leverage investment that triggers a burst of risk and is forced to close. .
“In fact, the highly leveraged investment in the bitcoin sector has once again made a comeback.†The head of the aforementioned domestic Bitcoin trading platform bluntly stated. Whether it is overseas or domestic, many Bitcoin trading platforms will provide corresponding investment leverage services. Specifically, investors can use their own bitcoin as a collateral to obtain a leveraged trading between Bits and Bits of 1.5-4 times from the trading platform. Once the bitcoin price falls to the stop-loss line, if the investor is unable to add Bitcoin collateral or the corresponding funds within the specified time, the trading platform will automatically force the liquidation to avoid the risk.
He calculated the account for the reporter. If a two-time investment leveraged aunt buys bitcoin at $15,000, when the bitcoin once fell to around $9,200 in mid-January, the investment loss would nominally reach about 80%. . But in fact, the Bitcoin trading platform is likely to ask her to recover bitcoin collateral or the corresponding funds when Bitcoin falls to $12,000, otherwise it will force a liquidation. The reason is that the trading platform can only tolerate a maximum loss of 50% for investors, and cannot be dragged down by the funds.
"As long as the bitcoin price drops slightly, the forced liquidation of the trading platform will increase accordingly." He bluntly said. This has prompted a certain degree of decline in bitcoin prices this year, which has led to more high-leverage investment "Aunts" stop-loss and forced liquidation.
However, as bitcoin prices plummeted by 30%, professional investors’ interest in bargain-hunting increased. However, now they also learn the lesson, and it is not easy to use high-levis bargain-hunting. The reason is that they realized that the regulation of encrypted digital currency will become stricter in the future, and the price fluctuation of Bitcoin will continue to increase. The highly leveraged investment will be easy to “burn into the fireâ€. Second, they are worried that many countries’ financial regulatory authorities have adopted many The measure “controls†the size of Bitcoin derivatives transactions, and raises the investment cost of Bitcoin by taxation, which leads to the decline of Bitcoin liquidity, and its investment value and scarcity are more easily replaced by other digital cryptocurrencies, which leads to the future of Bitcoin. The price rise is limited, and such a highly leveraged investment has the dilemma of diminishing marginal revenue and rising risk costs.
“In fact, most financial practitioners involved in Bitcoin investment have experienced the financial turmoil such as the 2008 subprime mortgage crisis. Therefore, they understand that high leverage investment is a big risk in the future when Bitcoin’s future development uncertainty increases. The person in charge of the aforementioned domestic Bitcoin trading platform pointed out.
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