Today, nine years ago, a programmer bought two pizzas worth $25 in 10,000 bitcoins. The transaction cost nearly 1.4 billion yuan if calculated at the highest price in the history of Bitcoin.
This now expensive transaction has allowed Bitcoin to come into contact with the real world for the first time. Today, more and more people are beginning to understand and invest in cryptocurrencies, including large institutions.
In the past two months, Bitcoin has soared from $4,000 to $8,200. While cheering for the "bull market" that was caught off guard, people were looking for an off-site institution that sizzled the cryptocurrency market.
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However, the entry of large institutions and large capitals, in addition to bringing new vitality to the cryptocurrency market, has also brought new risks and crises.
Bitcoin's big rise is confusing
“The bitcoin has risen in the past few days, and the company seems to be a lot of fun,” said the blockchain practitioner.
"I am now in addition to going to work, the two days of the weekend are put into the meeting of the players in the coin circle." A speculative person told 31QU, "This feeling is very similar to 2017."
More and more activities, more and more enthusiasm, this atmosphere seems to return to the big bull market in 2017.
On May 12th, Li Xiaolai, a teacher who had been in the long-awaited currency circle, published a microblog, and announced his return in high-profile. Almost at the same time, the news that “bitcoin rose above 8,000 dollars” was posted on Weibo. .
On May 14th, Bao Erye also sent Weibo to say "Buy a bitcoin and then we get older together." On the same day, the news of bitcoin's rise was on the Baidu hot search.
From the small leeks to the big scorpion, all of them expressed their emotions about the rapid growth of bitcoin prices.
But let's calm down and talk with the data first.
According to the Baidu Index, since April, the search index for Bitcoin has tripled directly from the previous 20,000. On May 15th, it has risen to around 110,000. The highest search volume since the history of Bitcoin is only worse. 6000.
It is worth noting that although the search index of Bitcoin has doubled, the search index on cryptocurrency and blockchain in the Baidu Index has remained calm as usual, with no significant increase or decrease.
At the same time, according to Coinmarketcap platform data, Bitcoin has more than tripled its transaction volume since April. From less than $10 billion before April to $34 billion today.
Not only the volume of transactions, but also the number of users. According to statista statistics, the number of Bitcoin global blockchain wallet users has maintained a high growth rate. In the first quarter of this year, it increased by 8.6% from the previous quarter and increased by 44.7%.
New users have brought new funding to the cryptocurrency market.
eToro analyst Mati Greenspan said: On May 14, the Chicago Mercantile Exchange Group's bitcoin futures hit a record high of 33,677 contracts, while the total platform trading was 167,385 bitcoins, or about 9.2 billion yuan.
Users, funds, search volume, transaction volume, no matter from which point of view, the bull market seems to have come.
This "bull market" was too late to defend. Last year, the industry said that the currency circle was ready for the winter in the long winter.
“What caused the price of bitcoin to rise sharply?” cryptocurrency analyst Tone Vays was puzzled at this year’s New York Consensus Conference. He said he was completely lost in the current currency market scenario and could not find a sharp rise in the price of the currency. the reason.
“The bitcoin and other markets have seen an unprecedented upsurge. The same thing happened at the end of the bear market in 2015, but everything that happened now is not quite right. I thought bitcoin would rise from $4,000 to $5,100 and then slow. It fell, but it was confusing to see it rise to $8,400," Tone Vays said.
This kind of worry represents a considerable part of the currency group psychology, they racked their brains and wanted to find the reason behind the big rise in bitcoin.
The bitcoin has risen sharply, and there are different opinions. Some people think that it is the "consensus conference" effect, which means that the price of bitcoin will rise during the conference. Some people think that it is the good news released by Bakkt of the cryptocurrency exchange. It is because Bitcoin is about to be halved.
But more people believe that the main reason for the rise in bitcoin prices is the strong presence of OTC institutions.
CNBC issued a message saying that the reason for the rise in bitcoin is that interest from bitcoin transactions has increased from large investment institutions, such as the Bakkt trading platform of Intercontinental Exchange ICE and the cryptocurrency trading service of Fidelity, which indicates that the mainstream adoption of Bitcoin will gradually expand.
Barry Silbert, CEO of Digital Currency Group, made it clear that more than 70% of the Bitcoin investment analysis platform, Grayscale Investments, is from institutional investors.
The appearance of off-site institutions seems to have been finalized.
The currency circle is the chessboard, and the off-site institution is the chess player.
The pace of institutional cryptocurrency is accelerating. Only this year, many Internet giants and financial tycoons have entered the market.
Facebook has long been tempted by cryptocurrencies. In March of this year, Facebook announced a large-scale expansion of talents in the field of cryptocurrency, and the possibility of issuing coins.
Almost at the same time, the world's retail giant Amazon submitted a patent application for the POW encryption system to the US Patent Office.
In the financial sector, at the end of February this year, NASDAQ, the world's second largest stock exchange, officially added the index of Bitcoin and Ethereum, which is a symbolic event for traditional financial markets to accept cryptocurrencies.
On May 14th, Intercontinental Exchange ICE launched the cryptocurrency exchange Bakkt, which marked that the traditional financial market is not satisfied with the passive acceptance of cryptocurrency, but chose to take the initiative to enter the currency circle.
In addition, JP Morgan Chase announced its "marriage" with the cryptocurrency and released its own cryptocurrency JPM Coin.
The hottest thing today is the international investment giant Fidelity. In May, Fidelity held a special conference on cryptocurrency at its Boston headquarters, inviting domestic well-known mine owners. The outside world believes that Fidelity is already quietly deploying bitcoin mining and related energy industries.
In fact, we can also snoop from the data to the footsteps of the institution's admission.
For an off-site organization to enter the currency circle, there are no more than two methods. The first is the stable currency USDT.
As the currency of China Unicom's currency and cryptocurrency, the trading volume of Bitcoin has risen sharply, from 8.3 billion US dollars in early April to 34 billion US dollars in mid-May.
In addition to the USDT, over-the-counter transactions also carry huge amounts of capital circulation. “Large households choose over-the-counter trading, and retail investors choose exchanges.”
In fact, for institutional investors, large bitcoin orders lack liquidity if they are purchased on the exchange. They prefer a transaction method with stable price and large transaction volume, and the over-the-counter transaction is more in line with Their needs.
According to the Coindance platform data, the world's largest platform for Bitcoin over-the-counter trading, LocalBitcoins. We found that in the three months before the bitcoin surge, bitcoin over-the-counter volume soared from around 8,000 last year to 15,000. Note that before the bull market, the off-site organization has begun the layout of Bitcoin.
“Our over-the-counter business has achieved triple-digit growth,” said Jeremy Allaire, CEO of Circle Internet Financial.
Coindance's over-the-counter data also revealed more details.
After the $8,300 in Bitcoin in May, the number of off-exchange transactions in Bitcoin began to decline. At the same time, the number of OTC transactions began to rise. However, as bitcoin prices gradually stabilized, in addition to some of the off-exchange funds crouching, waiting for the next outbreak, more funds began to be in the deeper level of the currency circle.
Another phenomenon is worth noting. At present, despite the continuous flow of funds into Bitcoin, the market value of Bitcoin in the entire cryptocurrency has not increased, still maintaining at 50%.
One explanation is that off-exchange funds, after entering Bitcoin, left the bitcoin and entered other cryptocurrencies.
According to statistics, starting from May 5th, Bitcoin has almost a few billions of dollars per day, and billions of yuan has flowed out. On the contrary, cryptocurrencies such as Dash, Ethereum, and TRON have almost every day.
It can be seen that through this big rise, the large capital institutions have carried out a layout from top to bottom and from inside to outside.
Is a blessing or a curse?
The activity of Bitcoin and the entire currency circle is a major outbreak of the time and place, and what impact will these new institutions and funds have on the cryptocurrency market?
Analyst Mati Greenspan has said that Fidelity, which is actively deploying Bitcoin, currently manages $2.46 trillion in funds. If only 1% is used for bitcoin hedging, there will be about $25 billion in the market.
However, the current market value of Bitcoin is only $140 billion, and even the entire cryptocurrency market value is only $260 billion, which is comparable to Amazon's market capitalization. This means that a large and wealthy traditional investment institution can mobilize the entire cryptocurrency market with a 1% effort.
At present, the cryptocurrency market represented by Bitcoin has become attractive to traditional institutions.
The two-year investment income data shows that the S&P 500 index is 19.9%, gold is 1.3%, oil is 31%, and bitcoin has a staggering 457%.
As early as the end of October last year, the founder of the currency, Zhao Changpeng, said that if a fund like Fidelity allocates 5% of its portfolio to cryptocurrency (about $350 billion), it will increase the market value of the entire cryptocurrency by two. Times.
However, in addition to pulling up the price of coins, the entry of large institutions and capital will also change the original ecology of the currency circle.
Traditional exchanges have strong resources and connections, and they can lobby government officials and members of Congress to change the perception of cryptocurrencies.
To a certain extent, the entry of traditional OTC exchanges is a threat to home-grown currency exchanges.
Nasdaq CEO Adena Friedman said: "Once the emerging digital currency industry is regulated, Nasdaq may become a cryptocurrency exchange in the near future."
In contrast, BitMEX, one of the currency cryptocurrency exchanges, received a ban from the US SEC, which stipulates that “any exchange that provides services to US residents needs to strengthen supervision through the platform and promptly shut down those operations that violate US regulations. US trader's account."
As a result, BitMEX had to close the US user account due to pressure from the authorities, resulting in a sharp decline in trading volume. Contrary to BitMEX, the daily compliance of the US regulated Chicago Mercantile Exchange (CME) is growing against the trend.
Organizations that are well versed in financial gameplay and have large capital will gradually encroach on the right to speak of cryptocurrencies, and the relationship between the cryptocurrency world and the traditional financial sector will become closer.
This close connection will make the cryptocurrency market bigger, but on the other hand, it will make the "financial safe haven property" that cryptocurrency has always been proud of slowly disappear.
The steady presence of off-site institutions has pushed up a new bull market in the cryptocurrency market and has also created new risks.
Text /31QU Zhong Benyu