Today I mainly want to chat with you, the controversy caused by this wave of tumbling (about the controversy of Bitcoin “safe haven property”), analysis, Bitcoin hedging attributes are still not in place.
1. How did Bitcoin become a “hazard avoidance tool”?
Financial markets can bring lucrative returns to investors, but financial markets are highly vulnerable to external factors such as natural disasters, wars, and terrorist attacks. These natural disasters and man-made disasters will have a big impact on financial markets, which makes finance The market has a lot of uncertainty. Therefore, in financial investment, investors hope to find a “safe haven” tool with stable value and high consensus to ensure that their assets will not be devalued due to natural disasters and man-made disasters, and the loss of assets will be minimized. For thousands of years, gold has been acting as a “hazard avoidance tool”. When banknotes are in crisis, gold will show a strong hedging function.
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After the physical gold, Bitcoin as a "digital gold" has been sought after by investors. In 2009, a man named Nakamoto founded a digital currency system, Bitcoin. This set of digital currencies does not depend on the central bank, does not rely on centralized financial institutions, but relies on technologies such as code and passwords. Means to achieve production and circulation. After 10 years of development, the market acceptance of Bitcoin has gradually increased, and even evolved into a new type of investment method for hedging and profiting.
But in fact, Bitcoin is essentially a technological innovation. It is a technological advancement. It can even be said to be a "democratic experiment" in the field of money. It has no value at first and does not have investment properties, let alone Becoming a “safe haven tool”, when you can only exchange two pizzas at the beginning of 10,000 bitcoins, you can’t think about it. Then, from a little-known "geek game", Bitcoin has evolved into a new type of safe-haven investment tool in just 10 years? Things will be traced back to the 2013 "Cyprus" incident:
In April 2013, in order to obtain the EU's 10 billion euro emergency aid loan, the Cyprus government announced a deposit tax on people who have deposits in Cyprus's domestic banks. The deposit tax rate of deposits of 100,000 euros is as high as 9.9%, and the tax rate of deposits below 100,000 euros. Also reached 6.75%. For a time, the confidence of the Cypriot people in the government was greatly reduced, and it also triggered a chain reaction. Everyone in the country was in danger. Because they worried that the assets were “swallowed up” by their unexpected policies, they chose to cash in bank deposits and turned to “anarchy.” Bitcoin. The “Cyprus Incident” thus became the fuse of the first round of bitcoin bull market. Bitcoin not only ushered in a larger investment volume, but also won a wider range of value recognition.
Second, why choose bitcoin instead of gold?
Some people may ask, when encountering a banknote crisis, natural disasters and man-made disasters, why not choose gold with higher consensus and longer history, but choose bitcoin? One of the main reasons is that Bitcoin has a greater profit than gold. Capital is profit-seeking, and this is the unchanging truth.
Compared with the relatively stable income of gold, Bitcoin has a larger income and a larger increase. Bitcoin has become a new investment method favored by investors. After all, the attraction of making quick money is very big, and many people cannot resist this temptation. . In the long run, Bitcoin has risen 20 million times in a decade. From this increase, Bitcoin does not only have storage value like gold, but it is much higher than the income of gold.
Moreover, as far as Bitcoin itself is concerned, it is very similar to the advantages of gold. What are the advantages of gold? First of all, in terms of gold itself, gold has good physical properties and stable chemical properties. It has less storage in nature, is difficult to mine, and is rare and expensive. It has strong scarcity. Secondly, gold is a “hard currency” with high international recognition and a wide range of circulation. It can be exchanged for other countries' currencies (such as the US dollar, Japanese yen, and the euro). When the country loses its currency due to natural disasters and man-made disasters, it hoards gold. Can be "returned from the whole body."
Bitcoin also has the golden "things that are rare" and "strong international liquidity." The total amount of Bitcoin is constant at 21 million, which is halved every four years. It has the scarcity of “things are rare”. In addition, Bitcoin is a point-to-point transaction transmission that is not subject to intervention by various agencies and can be circulated around the world. You can send your bitcoin to any corner of the world. In addition, compared with gold, Bitcoin's income is higher, the increase is greater, for profit-seeking psychology, of course, choose to invest in bitcoin!
In addition, the choice of bitcoin, rather than gold, has a certain relationship with "hype". The media screamed for bitcoin profits, and investors were all excited. In a certain sense, "hype" may be due to "conspiracy theory." The history of gold is too long. It has been regulated by financial institutions of the state and other countries for thousands of years. It is basically impossible to control it. But bitcoin is different. Bitcoin is a new type of asset. Whoever enters the market early, who holds more value, is the "banker." In the early hands, there were a lot of bitcoin players. Through the "Cyprus" incident, the speculation of a bitcoin, allowing more retail investors to enter the market, pulling the bitcoin price and then shipping, is not without possible.
In fact, most people invest in Bitcoin, hoping to make a "quick money" with Bitcoin. However, making quick money means that the risks and uncertainties to be faced will be magnified indefinitely. If you look at Bitcoin from time to time, you will know a "roller coaster" market! Moreover, the value of Bitcoin is not recognized by the world like gold, and it faces a severe regulatory test. More importantly, the price of Bitcoin is very susceptible to external factors. Although the gold market is also affected by external factors, it does not react as much as Bitcoin. In other words, even if the gold market is adversely affected, it will not be particularly distressed, because after all, there is a national endorsement of gold; but bitcoin is different, once it is adversely affected by external factors, the price will plummet. That is to say, for Bitcoin, if it is good news (such as policy-friendly), it is all happy; but if it is bad news (such as the state ban), then the price will be very serious, causing a fatal blow to investors. .
Third, under the madness, can Bitcoin be used as a “hazard tool”?
Recently, US regulators announced that they have tightened supervision over the digital currency sector, causing panic. In addition, Trump announced the easing of the Sino-US trade war. These factors have led many investors to choose to sell bitcoin and turn to a more complete stock investment field. As a result, the price of Bitcoin has been falling all the way. In the morning (August 15th), it finally fell below 10,000 US dollars, and the daily decline reached 8%. Bitcoin fell, and other digital currencies must not be spared. Even the very strong platform coins have not continued to stabilize. Such a market has caused people's suspicions: Under the tumultuous decline, can Bitcoin be used as a “hazard tool”?
To answer this question, we can make a comparison with the “healing tools” such as gold and national debt that are generally recognized.
First of all, compared with physical gold, although the physical gold is scarce and internationally recognized, physical gold has one of the most important problems, that is, transportation and carrying are not very convenient, and although gold is stable in composition, it encounters some Special natural disasters and man-made disasters, can not be parried: you take a suitcase of gold to go to the border inspection, will certainly be stopped to investigate; you put gold in the domestic bank, once the country is in chaos, the bank is bombed, or suddenly earthquake, The bank was ruined, and the consequences were unimaginable… and Bitcoin is a digital currency, not dependent on the real thing, but on the code, there is no problem of carrying and transporting at all, and there is no problem of being destroyed by natural disasters. (Of course, it may be destroyed by "human disasters," such as hacking), these are the advantages of Bitcoin in gold.
Then it is compared with national debt. Treasury bonds are endorsed by the state as credit, and many people believe that national debt is the most reliable "safe haven tool." However, the dependence of national debt on national sovereignty is particularly high. For China, the United States, such a strong and stable country, the credibility of national debt is high, basically no problem; but for some countries with political turmoil? This is why the enthusiasm for bitcoin investment and digging is now so high for citizens of political instability such as Iran and Turkey. With the help of the Internet, Bitcoin is borderless, non-sovereign, and accessible, which are characteristics that national debt does not have.
Therefore, in theory, Bitcoin is an ideal "safe haven tool." Especially for the big environment we are in now, the geopolitical crisis has escalated, and the risk of holding assets such as banknotes, stocks, and treasury bonds has risen. In order to cope with the possible market collapse risk at any time, we have chosen Bitcoin as a “safe haven”. No. Quoting Wall Street data analysis: There is currently no correlation between Bitcoin and popular financial instruments. It has nothing to do with US stocks, A shares, bond markets, gold, and is an extremely rare asset allocation.
Fourth, Bitcoin as a "hazard tool" must face the challenge
The theory is so, but Bitcoin is also facing many challenges as a new “hazard avoidance tool”:
(1) Consensus factors
Can "bitcoin be a safe haven" a consensus? In Xiaobian's view, the consensus factor is even greater than the policy factor. Because bitcoin is “decentralized”, Bitcoin data is shared and maintained by thousands of network nodes on the global Internet. No one can tamper with the data, and no country or institution can manipulate it. So, even if the state bans it, if the public approves it, then it will eventually have a circulation transaction scenario:
At the beginning, Bitcoin was silent in the "formal trading channel". You went to the store and said that I can buy a computer with a bitcoin. I am afraid that the salesperson will ruthlessly give you a "please" to go out. However, the dark network recognized it. Bitcoin has a high degree of consensus on the dark network. The dark network only accepts bitcoin payment earlier, but does not accept legal currency. The store does not accept bitcoin, and the darknet accepts bitcoin. It is the role of consensus; gold, treasury bonds and these assets are sound hedging tools, and it is also a consensus.
(2) Policy factors
Although the authorities are not allowed to bitcoin, the policy factors will still have a great impact on the Bitcoin market: when Germany and other countries first recognized bitcoin, bitcoin prices soared at one time; and China’s "94 events" The “destructive” blow of coins and even the entire digital currency is also obvious to all. In addition, policy factors will inevitably lead to "paradox-oriented", and the public opinion orientation is basically very polarized, black and white, or good or bad, which will have a very large impact on Bitcoin:
If the authoritative media sings bitcoin, how do you keep investing in bitcoin, and even your old parents will operate bitcoin, then you can't buy it at this time? However, when it is necessary to explain, policy factors must be based on national interests. If the national interests are harmed, then the opposite is the end, and Bitcoin will become a "swindler and pyramid scheme" among the layman population.
(3) "Competitor" factors
At present, central banks are actively deploying digital currency, and it is not known whether Bitcoin can win the "regular army" of the central bank's digital currency;
(4) The value factor of Bitcoin itself
Finally, returning to the value of Bitcoin itself, the current price of Bitcoin still has a large bubble, and the value of hype is greater than the actual value, making its price fluctuations extremely unstable. If Bitcoin really needs to be a “hedge tool”, then the price stability condition is essential.
The above is the view of Xiaobian. Finally, I hope that everyone can accumulate some knowledge of investment and financial management, pay more attention to industry information, and actively study the official news released by the People’s Bank of China, public security organs and other authorities, in the face of the new thing of "bitcoin". When you don't get the wrong car, you won't get on the bus.