Recently affected by the new coronavirus epidemic, global stock markets have suffered, but the price of bitcoin has soared in the short term, which has attracted widespread attention. Looking back a while ago, Iran and the United States clashed, and the price of bitcoin also rose all the way, from 6800 to 8300. . As if something bad happens in this world, the price of currency will fluctuate, and the risk-averse attribute of Bitcoin will even become a gimmick with seven points of truth, which will be crazy output by the marketing account.
So how much can Bitcoin's hedging properties be trusted? Is it reasonable to invest in Bitcoin when the economy is damaged and the amount of free money in the pocket is reduced? At 2 pm on February 18, 2020, the founder of Tiger Fu Wang Ruixi was a guest chain node AMA and had a discussion with community users on the risk-avoidance properties of Bitcoin.
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The hedging attribute of BTC is the wishful thinking of players in the circle?
The reason many people advocate for Bitcoin's safe-haven nature is simply: the worse the external economic environment, the more promising the currency market is. Especially at the beginning of this year, the US-Iraq conflict, Brexit, the epidemic struck, and so on, the currency price seems to be rising. But we have to be clear that any negative information is strongly associated with the sharp rise in the price of the currency, and such a connection lacks logical support. Bitcoin's hedging properties are more reflected in the process of value transfer and storage. Regarding this, Wang Ruixi stated:
I think Bitcoin's safe-haven nature can be said to have been recognized in a limited range, but it is too early to gain the favor of the entire financial world. The meaning of safe-haven assets is to avoid risks, but for many chaotic regions, buying Bitcoin is very difficult. Of course, Bitcoin can play a role in value transfer and storage. Compared with currency, the nature of hedging is still insufficient. In addition, due to the fact that the capital capacity of the BTC market is too small, the hedging demand for larger funds will also be assumed as the market value of Bitcoin increases.
As far as the current situation is concerned, under the influence of the epidemic, the price of the currency has risen to a certain extent. This aspect reflects the risk aversion property. On the other hand, there are also concerns among users. Does this wave of increase itself also include risks? In the AMA, Wang Ruixi emphasized that hedging refers to avoiding the risk of reduced purchasing power caused by the inflation of fiat currency. At the same time, hedging is also a factor that causes Bitcoin to skyrocket. As the market value of bitcoin increases, bitcoin will carry more and more volume, and the volatility will become more and more stable, so bitcoin will not bring huge bubble risks because it can avoid risks.
Bitcoin will not shake gold's status for a long time
People often compare the performance of bitcoin with gold, believing that both have hedging properties and will perform better during periods of economic downturn. Especially after the U.S.-Iraq conflict, the price of bitcoin has almost kept the same trend as the price of gold, and at one time almost held its "digital gold" status. However, after all, the scope of Bitcoin's audience is limited and its development history is only over ten years. Compared with gold, these two points are far from enough. On the question of whether Bitcoin will replace gold, Wang Ruixi said:
I personally prefer to support the coexistence of the two, and Bitcoin will not shake the status of gold for a long time. The value of gold has stood the test of thousands of years worldwide and is one of the foundations of today's financial world. Bitcoin is sometimes referred to as digital gold and is affirmation of its value. In addition, compared with gold, Bitcoin's audience is still very small, and the threshold for use is also high. It is too early to replace gold. In fact, it does not need to be replaced. Bitcoin has its own unique value. At any time, Bitcoin is well known to more people and more people use it, which will increase the probability of using Bitcoin. This process is also an ideological change.
Faced with emergencies, Bitcoin's short-term hedging instrument attributes and public sentiment bias have shown a clear trend, but its stability as a safe-haven asset is clearly not as good as gold. Therefore, the outside world has also questioned that Bitcoin's "hedging property" may be an illusion of banker manipulation. In this regard, Wang Ruixi mentioned that the price may be manipulated, but the people who manipulate the price will not end well. In addition, the bitcoin market has sufficient degrees of freedom, and some black swan events will occur at any time. It is almost impossible to manipulate the market for profit. As Wang said, the hedging attribute is an important attribute of bitcoin itself.
In summary, currency price fluctuations have been happening in the market. When we analyze the reasons behind them, we cannot use risk aversion to summarize them, nor can we completely ignore the nature of Bitcoin itself. And on the way of safe-haven assets, even today's king gold has encountered Waterloo-in 2008, during the collapse of the US financial systems such as Bear Stearns and Lehman, the price of gold from 1020 It fell to $ 700, and the price of silver fell from $ 21 to $ 7. As the global financial system collapsed, these precious metals moved in anticipation.
The gold that has stood the test for thousands of years is still like this. Bitcoin, which has only a history of more than ten years, needs to be honed and confirmed for a long time. For more ordinary people, a comprehensive and rational approach to rejecting blind obedience is sometimes the best choice for risk aversion.
For a detailed review of this issue of AMA: https://www.chainnode.com/ama/408732