Xiao Lei: The big money that pushed the price of bitcoin up this time was the rich people.

Among the mainstream assets, the best performing asset in the year-to-date is crude oil. The current increase is over 40%, but it seems to be inferior to Bitcoin. The current price of Bitcoin is 95% higher than the price at the beginning of the year. .

If you want to find reasons for the rise in bitcoin prices, I think there are countless reasons to list, but most investors, or standing outside the market, should be said that the general explanation may be the rise in speculative sentiment. .

Of course, if we simply think of Bitcoin as a heavily speculative variety, there is almost no logic or room for analysis. For example, an analyst who opposes it may not even bother to analyze it.

The progress of the world actually comes from the ability of mankind to constantly deal with uncertainty, but this response to uncertainty is not a kind of activity like gaming. Participation in gambling, not only can not deal with uncertainty, but also an obvious way to create uncertainty, because in addition to "out of the old", gambling has almost no way to obtain deterministic results.

People's participation in stocks, futures, insurance, etc., is actually dealing with uncertainty, not manufacturing uncertainty, stocks give you the determined equity, futures to determine the time or price, insurance to give you a certain commitment. The logic behind the birth of Bitcoin, like futures, insurance, etc., adds an option to deal with some of the uncertainties of the future.

The first is the uncertainty of the credit currency:

From 2001 to 2007, the US dollar depreciated by more than 40%. The price of crude oil gold has risen several times. Many people are very dissatisfied with the depreciation of the US dollar. In hindsight, they can completely use the method of buying gold and crude oil. Sexual hedging. The problem is, you don't know when the dollar will depreciate because its supply and demand are very uncertain. No economist or Fed official can tell you how many dollars we will print in the future.

This issue does not seem to matter. After all, the US dollar is still the best currency in the world. Many experts will tell you more about the trusted logic of the Fed, but this can only add more uncertainty, such as asking him. Will the Fed raise interest rates or cut interest rates, and whether the balance sheet will expand? He will tell you that in the future, we must look at global macro trends, US unemployment rate, inflation, etc. This is not because they fool you, but by themselves. These factors determine the circulation of the dollar. The problem is that this will cause uncertainty to continue to increase rather than decrease.

So what does Bitcoin satisfy? It clarifies the circulation and solves the uncertainty of the currency in circulation. But this is the first step. More importantly, you have to prove to the world how you can achieve a fixed circulation. Therefore, the real value of the blockchain technology used by Bitcoin is a proof process for the circulation and safe operation of Bitcoin.

At this time, the person who is willing to hold Bitcoin actually buys a fixed circulation of currency or merchandise, the same logic as buying antiques and gold and silver commemorative coins. The idea of ​​these people is that I can bear the uncertainty of price, the uncertainty of the market, and the uncertainty of the transaction, but I just want the certainty of circulation or production, which is the value of Van Gogh et al. Why the painting is getting higher and higher. This choice, with the choice of buying stocks, futures, or buying insurance, has no distinction between good and bad, and is worthy of respect.

Second is the uncertainty of financial services institutions:

As an intermediary, banks, payment settlement companies, etc., actually have a problem, that is, the uncertainty of systemic risks, for example, some people will care, I put money in the bank, what the bank is doing with the money, I Make a payment, how exactly this money can be safely and punctually transmitted to the other party.

In early April of this year, the US Securities and Exchange Commission (SEC) approved a company that issued "digital currency" to raise funds by selling a custom cryptocurrency. This is the first "no objection" letter issued by the SEC for blockchain financing. The reason why the company can get a "no objection" letter is simple. The company's cryptocurrency is only used to help users book private jets. However, the restrictions on banking hours have brought a problem to the charter industry. Rich people may need wire transfers at any time, but they are subject to bank hours. If you don't pay, the plane won't take off. Traditional financial channels can take too long. This problem can be solved if you have a 24-hour run and do not need any financial intermediary cryptocurrency.

Bitcoin can skip the bank and any third-party intermediaries, and complete the payment all the time. There is no time, geographical restrictions, etc., and there is no need to identify the authenticity, which greatly reduces the transaction cost of financial institutions' uncertainty.

Many people may say that the current transfer cost of Bitcoin is also very high. In fact, this is not a problem at all, because the transfer cost is transparent and it is certain. Every time you turn, you will clearly tell you how much the fee is. All the things that are certain are not risks.

The third is the uncertainty of national barriers:

To this day, many countries around the world have adopted different levels of capital control and currency exchange barriers, but for many people who have already lived beyond national borders, these problems are very difficult.

In the middle of last month, CorporateTraveler, the UK's largest travel management company, announced that it would work with Bitpay, a cryptocurrency payment company, to accept bitcoin (BTC) payments. Corporate Traveler does not need to focus on the cryptocurrency price volatility market because Bitcoin converts directly into pounds.

It is no longer a case for a travel company to accept the payment of bitcoin. In March 2018, the German National Tourist Office announced acceptance of bitcoin and other cryptocurrencies as compensation for its services. In August of the same year, the Queensland Government of Australia funded a donation to the TravelbyBit digital currency payment platform, which aims to promote tourism in central Queensland by selling cryptocurrency travel offers.

Tourism may be different from other transactions. Travel is actually relatively random, and the amount of consumption is extremely uncertain. For many high-net-worth people, the biggest headache every year may not be where to travel, but about the process of tourism. Some kinds of transaction payment things; for example, I know a friend, he travels to some countries, finds that the house there is cheaper, he buys a set, sometimes he also buys a yacht and rents it there. Actually it is uncertain.

The certainty of Bitcoin is that you can hold Bitcoin, which can be directly converted into local currency without transnational transfer in most countries around the world. Of course, I don't recommend Chinese users to do this because it is illegal.

Based on these uncertainties, many people may think that this is not a very common risk aversion, or a demand point for dealing with uncertainty. So my conclusion is that if Bitcoin's role is to counterattack, then the future Bitcoin player may become a rich game. Because for most people, in addition to price fluctuations, other features of Bitcoin (such as the three functions I listed) are meaningless to them and may not be used for a lifetime.

Therefore, as a social resource, Bitcoin is destined to flow from the middle class to the super rich. This is in line with Coase's theory of property rights. In the end, who can use it well, or who is in its hands, has the highest value and who it is.

Then we need to study some questions, where are the rich people all over the world? How did they get in touch with the investment target? In China, many people may say that the private sector of the bank has gathered a lot of high net worth users. In fact, you go to see, these high-net-worth users, in addition to buying mainstream investment products, the most interested in alternative investments. Including jewelry, gold, collections, etc., this is the most basic product area for these private travel users, I have told gold and bitcoin to private banks of some banks more than once. For the world, where are the real rich? Of course, it is in the hands of investment banks and well-known capital management companies.

In order to serve these high net worth users, these international financial institutions are looking for new investment targets every day. Since the middle of last year, Goldman Sachs has been involved in the bitcoin market in a high-profile manner, first asking users about their views on bitcoin prices, and then on behalf of customers to start using their own funds to trade bitcoin futures. In September last year, Morgan Stanley began to introduce a bitcoin derivative called "price returnswap" to its customers. In March of this year, Fidelity Digital Assets (FDAS), the digital asset trading and custody division of the Fidelity Group, which manages the world's trillions of dollars, went online and began supporting the hosting of Bitcoin assets.

The logic of the rich is completely different. When you care about making money, they care about how to distribute wealth. When you are researching investment and return, they are considering liquidity and safety issues when you consider safety and mobility. When they are sexual, they are studying transnational or cross-regional wealth. When you study transnational investment, they begin to pay attention to the ultimate inheritance and cultural connotation of wealth.

In short, the rise in the price of this bitcoin is not the utopia of geeks, nor the rich dreams of grassroots retail investors, but the international rich clubs that have begun to provide bitcoin services to the super rich.

Text / Xiao Lei

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