Each editor: Bi Luming
Over the weekend, virtual currency staged a "thrilling scene."
On March 17, Beijing time, the virtual currency market suddenly crashed. The price of Bitcoin once fell below 65,000 US dollars per coin, with the largest intraday drop exceeding 6%; the price of Ethereum once plummeted 9.77% in Japan. According to coinglass data, in the past 24 hours of , a total of 161,273 people in the virtual currency market were liquidated, with a total liquidation amount of US$520 million (approximately RMB 3.744 billion).
On the eve of this round of plunge, the virtual currency market led by Bitcoin staged a crazy bull market. A large number of investors poured into the virtual currency market, and the price of Bitcoin continued to set new historical highs. On March 14, Bitcoin hit a record intraday high, approaching US$74,000 per coin, a cumulative increase of more than 70% compared to the beginning of this year. Indicators for the top 100 tokens (including ether, bnb, solana, etc.) have also increased by about 60%.
According to a report by the Securities Times on the 17th, the main logic supporting this round of rising Bitcoin prices is the following three points:
First, the issuance of Bitcoin spot ETFs brings more incremental funds to the market. Data shows that since the beginning of 2024, Bitcoin fund inflows have reached US$10.6 billion (approximately RMB 76.3 billion), driving the price of spot Bitcoin higher;
The second is the favorable fermentation such as "halving". It is understood that Bitcoin "halving" is the halving of mining rewards, which occurs approximately every 4 years. The specific time depends on the block generation speed of the Bitcoin network, which will reduce the supply of Bitcoin, and is expected to occur in April 2024. On March 23, the block reward will be reduced from 6.25 (BTC) to 3.125 (BTC). In anticipation of a reduction in supply, traders are pouring into the Bitcoin market before the “halving” event in April;
Third, the market’s expectations for an interest rate cut by the Federal Reserve have also provided impetus for the skyrocketing price of Bitcoin.
In the context of the crazy funds and the most popular Bitcoin, an interesting phenomenon has appeared in the market: while gold ETFs are experiencing capital outflows, Bitcoin ETFs are experiencing capital inflows. Data shows that since the beginning of 2024, Bitcoin fund inflows have reached US$10.6 billion, while at the same time, physical gold ETFs have outflowed US$7.6 billion.
According to a report from Beijing Business Daily, under the multiple signals, does Bitcoin still have further room to rise? What's the future? Yu Jianing, co-chairman of the China Communications Industry Association's Blockchain Special Committee and honorary chairman of the Hong Kong Blockchain Association, pointed out that digital assets led by Bitcoin can be considered a "future asset" whose value can effectively travel through economic cycles. . Digital assets can be understood as a mirror of the development of the digital economy. Just as the stock market reflects the relationship between real industries, the revaluation of digital assets reflects the development and prosperity of the digital economy. However, as a highly volatile asset, the price of Bitcoin may experience severe fluctuations in the short term, which largely depends on market sentiment, macroeconomic environment, regulatory policies and other factors.
Yu Jianing also reminded that the fluctuation of Bitcoin price is part of its essential attributes, and any investment decision should be based on sufficient market research and personal risk tolerance. Understanding the status of Bitcoin in digital assets and the deep-seated logic of the relationship between digital assets and the digital economy is of great significance for investment decisions and market analysis.
According to reference news, the British "New Scientist" weekly website reported on March 12 that the U.S. government has proposed taxing cryptocurrency miners to reduce the industry's huge impact on the environment. But experts warn the move may just shift the problem elsewhere.
Cryptocurrencies like Bitcoin ensure security through a process called “mining.” The process involves intensive calculations and considerable power consumption. The latest data from the University of Cambridge in the UK shows that Bitcoin mining activities account for 0.69% of the world’s total electricity consumption.
In the United States, the government estimates that up to 2.3% of the country’s electricity will be consumed by 137 cryptocurrency mining farms in 2023. At the same time, Texas residents saw their electricity bills increase by 5%, which is believed to be directly related to the increase in electricity demand caused by cryptocurrency miners.
U.S. President Joe Biden’s proposed fiscal year 2025 budget states that cryptocurrency mining “negatively impacts the environment, impacts environmental justice, and raises energy prices paid by those who share the power grid with digital asset miners.” .
Daily economic news comprehensive Beijing Business Daily, reference news
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