Driven by the abundant liquidity of the global capital market, the keenness of investors to chase risks, and the start of buying by corporate and institutional investors, the price of cryptocurrency Bitcoin has continued to rise sharply this year.Market analysts believe that Bitcoin’s astonishing rise is challenging people’s imagination and may herald abnormal risks in global financial markets.
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According to data from the website of the market service organization “Bitcoin Counter”, the price of Bitcoin on the 19th was as high as $56,563, a record high, and the market value of Bitcoin exceeded $1 trillion on that day. Since the beginning of this year, the cumulative increase in bitcoin prices has been about 90%.
The main reason for Bitcoin’s recent rise is increased demand. As some financial payment platforms gradually accept Bitcoin, more and more companies and financial institutions have begun to deploy Bitcoin out of the consideration of asset management. The entry of these heavyweight players has significantly increased the short-term market demand, and Bitcoin is updated daily. The increase is very limited, and the increase in demand has undoubtedly greatly stimulated the price of Bitcoin.
In an interview with the media a few days ago, asset management giant BlackRock’s chief investment officer of fixed income, Rick Reid, said that in anticipation of higher inflation and increased debt, people are looking for assets that can appreciate. “So we started to get involved in Bitcoin. investment”.
According to reports, in January, two funds under the BlackRock Group listed Bitcoin as a potential investment target. Reid said that with the evolution of technology and regulation, some people believe that Bitcoin should now be included in their investment portfolio, which has pushed up the price of Bitcoin.
JPMorgan Chase analysts believe that Truth’s recent announcement of the purchase of Bitcoin undoubtedly led to speculative buying in the market, which changed the short-term trend of Bitcoin.
Jim Reid, a research strategist at Deutsche Bank, said that a few months ago, companies and institutions hardly invested in Bitcoin. Now they are entering this field, and the Bitcoin market has begun to form a certain demand.
Some investors said that one of the reasons for buying Bitcoin is that Bitcoin is equivalent to digital gold, which can hedge against inflation and maintain value.
However, JP Morgan Chase’s research report pointed out that the positive correlation between Bitcoin and gold, the U.S. dollar and the S&P 500 index has been enhanced in the past year. Coupled with the high actual volatility of Bitcoin, Bitcoin is more suitable as a risky asset rather than Safe-haven assets.
JPMorgan Chase believes that from the perspective of risky assets, the reasonable price range for Bitcoin is between $11,000 and $25,000. The price of $25,000 has already reflected the impact of the institution’s long-term acceptance of Bitcoin, and the current price of more than $50,000 is unsustainable.
In addition, there is still a lot of controversy over whether Bitcoin and other cryptocurrencies themselves are worth investing in, and there are still an absolute minority of companies that have started investing in Bitcoin. Many market participants are worried about the risks that may be caused by the rapid rise of Bitcoin.
Ken Griffin, the founder and CEO of the well-known hedge fund American Castle Company, said that he did not want to spend too much time thinking about cryptocurrency, “I can’t see the economic foundation of cryptocurrency.” Oliver Percy, president of Bronson Meadow Capital Management in the United States, said that he has been worried that cryptocurrencies are easily manipulated.
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