The nearly 90% increase took less than two months. I am afraid that only virtual currency can create such a sensational story these days.
The virtual currency represented by Bitcoin has recently experienced a "highlight moment". On March 12, Bitcoin reached a maximum of US$72,890 per coin, which is about 523,000 yuan per coin. It rose by more than 5% during the day, setting a new high.
In fact, this wave of gains has been going on for a while. Since January 23, the price of Bitcoin has entered a rising range, from $38,554 that day to March 12, an increase of over 86%.
The soaring prices have tempted many investors to make moves again. To pinpoint the lifeblood of these people who are trying to get rich overnight, a group of bloggers who "teach you how to 'speculate' in coins" have once again appeared on major social platforms recently.
Under the surface excitement, there is an undercurrent of risk surging all the time. Not only are the rollercoaster-like price fluctuations overwhelming the hearts and wallets of most ordinary investors; it is not only illegal to speculate on virtual currencies in China, but there are also various "edge" scams emerging in an endless stream, which may cost you all your money if you are not careful. If you don’t return, you will also come into contact with the high voltage line of the law.
The skyrocketing Bitcoin
Bitcoin’s wave The rally has been going on for almost two months. Coindesk statistics show that in less than two months, the price of Bitcoin rose from US$38,554 on January 23 to over US$72,000 on March 12, an increase of over 86%.
The last "highlight moment" occurred more than two years ago. In November 2021, Bitcoin hit a record of $68,999.99 per coin. Until the evening of March 5 this year, Bitcoin exceeded US$69,000. Since then, it has continued to rise and hit new highs many times.
The logic behind this wave of rising prices is also relatively clear. First, the issuance of Bitcoin spot ETFs brings more incremental funds to the market. On January 11, 2024, the U.S. Securities and Exchange Commission officially approved 11 Bitcoin spot ETF applications, including BlackRock and other institutions. Prior to this, investors in the cryptocurrency market were mainly "stragglers", and the entry of these asset management giants announced that "regular troops" are accelerating their entry into the market.
After the "regular army" entered the market, it brought incremental funds to the market. Farside Investors data shows that as of March 12, the Bitcoin spot ETF has accumulated a net inflow of US$10.1003 billion since its launch.
Second, the fermentation of positive information such as "halving" has pushed market sentiment to a high point. On April 23, 2024, Bitcoin will usher in the four-year "halving". At this stage, the number of Bitcoins obtained by "miners" for mining on computers will decrease. It is expected that the block reward will be From 6.25 (BTC) to 3.125 (BTC). Zhang Liangwei’s team at Soochow Securities believes that the halving rule objectively limits the growth rate of Bitcoin supply, has an anti-inflation effect, and helps promote currency price appreciation.
Third, the Federal Reserve’s mid-year interest rate cut expectations have also added fuel to the skyrocketing price of Bitcoin. Recently, Federal Reserve Chairman Powell reiterated that interest rates will fall this year. Many overseas institutions predict that the Federal Reserve will cut interest rates soon. According to CME Group data, the probability of a 25 basis point interest rate cut in June is 57.4%. A report released by Goldman Sachs in February showed that the Federal Reserve will begin to significantly cut interest rates in 2024, at least four times, and the first interest rate cut will begin in June. Industry insiders believe that once the Federal Reserve enters the interest rate cut range, risk assets will benefit, and digital currencies will also benefit from this.
Domestic investors speculate in currencies through "secret channels"
In During this round of gains, Asian investors have been extremely active. According to TheBlock data, investors in Asian countries such as South Korea account for about 70% of Bitcoin trading volume.
The "currency circle" is so popular that it has also attracted the envy of many domestic investors. The reporter noticed that many investors on domestic social platforms shared strategies for purchasing Bitcoin through overseas exchanges. Among them, Eureka Exchange, Huobi Exchange, and Binance Exchange have become the main purchasing channels.
In the official operating community group of an exchange that the reporter joined, the number of new mainland users in one hour exceeded 100.
"For retail investors, the way to make money in Bitcoin is very simple. Off-chain transactions and on-chain transactions." A popular science blogger in the currency circle introduced on a social platform say. Off-chain trading is mainly conducted on exchanges. You first pay to buy USDT, and then place buy and sell orders directly on the platform. “You can trade cryptocurrencies just like trading stocks.”
USDT is a virtual currency that pegs cryptocurrency to the U.S. dollar, with 1 USDT equal to 1 U.S. dollar. The blogger told reporters that the currency circle uses USDT for transactions by default because price fluctuations are small.
The reporter also found during the actual test (without purchase) that some overseas exchanges can still register, log in and trade with mainland identities, and do not need to modify them. Locate or purchase overseas ID. In addition, there is a type of "order teacher" active in multiple communities. They claim to be able to guide the Bitcoin trading process step by step and provide investment guidance. They usually need to operate at designated exchanges.
However, trading virtual currencies through the above channels has always been strictly prohibited in China, and the above channels are all "back channels" that violate regulations. In 2017, relevant departments required all domestic Bitcoin trading platforms to shut down and withdraw from the market. Subsequently, Bitcoin China, Weibit, and Yunbi.com successively announced the suspension of all trading operations. In September 2021, the People's Bank of China and other ministries and commissions jointly issued the "Notice on Further Preventing and Dealing with Speculation Risks in Virtual Currency Transactions" (hereinafter referred to as the "Notice"), which clearly stipulates the essential attributes of virtual currencies and related business activities: Virtual currencies shall not It has the same legal status as legal tender. Business activities related to virtual currency are illegal financial activities. The provision of services by overseas virtual currency exchanges to residents in my country through the Internet is also illegal financial activities.
Beware of risks
Due to regulatory restrictions, the above-mentioned Bitcoin The exchange has previously moved offshore. How do domestic investor funds “flow in and out” of transactions?
The reporter learned from many people in the currency circle that most of the above-mentioned exchanges are currently in the "C2C" model, that is, the counterparties of individual buyers are actually individuals. For peer-to-peer transactions, the platform does not have a capital pool.
A senior person in the currency circle explained that the underlying logic of this trading model is very similar to that of "Xianyu" (Note: Taobao's second-hand trading platform). Once you approve the price, the transaction can be completed, and the platform plays a monitoring role.
"Under this model, domestic players generally trade with domestic players. Trading cryptocurrencies with overseas players is risky and is subject to domestic supervision. Accounts It is easy to have problems such as difficulty in withdrawing money or freezing the card." The above-mentioned currency circles people explained that except for the purpose of illegal money laundering, most people will choose the "easy mode" for domestic transactions.
Although the risk of foreign exchange involving the entry and exit of funds is relatively small, there are still multiple risks in domestic "currency speculation".
On the one hand, the virtual currency market has been a mixed bag in recent years, and various "edge" scams have emerged one after another. (For details, see "Purchasing virtual currencies has increased 512 times, automatically collecting profits every day, and the "Yuanverse Investment" Ponzi scheme is resurrected") "In the market, except for a few mainstream virtual currencies that we are familiar with, most of the others lack underlying support." Hong Kong Wu Haifeng, a researcher at the Institute of Advanced Finance at the Chinese University (Shenzhen), told China Business News that many virtual currencies are essentially air coins that “cut leeks”. Currently, there are no channels for direct investment in electronic currency products such as Bitcoin in our country. Investors should be wary of such investment traps.
"Even if you invest in mainstream virtual currencies such as Bitcoin, their prices fluctuate greatly." A senior person in the currency circle told reporters, "Coin speculation" It is not a guaranteed profit, and you need to bear higher investment risks. It is recommended that ordinary investors should not blindly follow the trend and first clarify their own risk tolerance.
On the other hand, according to the "Notice", there are legal risks in participating in virtual currency investment and trading activities. If any legal person, unincorporated organization or natural person invests in virtual currencies and related derivatives and violates public order and good customs, the relevant civil legal actions will be invalid, and the resulting losses shall be borne by them themselves; if they are suspected of undermining financial order and endangering financial security, the relevant departments will be responsible according to law. Investigate.
JinseFinance
Alex
Huang Bo