Affected by the new coronavirus epidemic, the prices of "digital currencies" such as Bitcoin have plummeted, with prices falling by two-thirds within a week. People should fully realize that they cannot become "digital gold", nor can they become strong currencies or safe-haven assets. They should be completely shaken from the illusion of various "digital currencies" and have a sober and accurate recognition of currencies. know.
On March 12, affected by the speed and harm of the spread of the new type of coronavirus in the world (especially the United States and Europe), the global stock market fell sharply, including 11 countries where stock market meltouts broke out and the financial markets were very panicked. . At this critical moment, those who have been enthusiastically pursued and deeply believed by many people believe that it will replace the existing sovereign currency (fiat currency) and become a new type of "digital currency" that subverts and transcends national sovereignty (borderless) in the era of the digital economy. As "digital gold", Bitcoin will become a very important hedging and hedging asset. Its market price not only did not rise, but it fell more sharply. The maximum decline in 24 hours was more than 50%, and the lowest fell to $ 3,915. , The lowest point since March 2019. This not only makes the so-called "half quotation" that many people are eagerly expecting "the new halving" (after the introduction of bitcoin, automatic halving every four years) may result in price increases, but also staged in advance In response to the "half quotation" of the market price, the price fell by two-thirds within a week, and other "digital currencies" such as Ethereum also fell sharply, causing a large number of related contracts to be liquidated, and many people suffered heavy losses. The tragic situation of the "digital currency" market such as coins has greatly exceeded people's imagination.
So, after this tragic performance in the face of the epidemic, do anyone still believe that Bitcoin is "digital gold" or true "digital currency"?
Bitcoin has established a “total amount limit (total) (the total amount of gold on the earth is limited. Intuitively, the more difficult it is to dig, the more the amount of increase will gradually decrease until it is completely depleted). 21 million), the periodical (every ten minutes) fixed output (through "mining"), the newly added volume every four years is automatically halved to the end of 2140), and the rules are built into the system Among them, using the decentralized blockchain technology, the participating nodes jointly run the system and maintain the rules to jointly verify and record the acquisition, transfer and distribution of all bitcoins, thereby forming a "decentralized, open and transparent, traceable source. And difficult to tamper with "distributed ledger system. As a result, Bitcoin is considered by many to be "digital gold" and it will be able to overcome the excessive manipulation of national sovereign currencies by the government or monetary authorities, which is prone to overspending, causing a sharp depreciation of the currency and even causing a serious inflation or financial crisis. Invisibly shameful issues such as plundering the legal wealth represented by people holding money, truly maintaining the independence, fairness and holiness of currency, becoming a true "digital currency", and because of its "periodic halving" mechanism, Not only will Bitcoin not depreciate, but it will automatically increase its value due to the regular halving of new production. Therefore, it will definitely subvert and replace the traditional national sovereign currency, which has great economic and social value, and the sooner it will participate in it , The easier it is to obtain and the more room for appreciation. This makes people full of imagination and expectations for Bitcoin, and indeed enhances its attractiveness and MLM.
With more and more people participating, especially on the basis of Bitcoin, more and more network "digital currencies" such as Ethereum have been spawned, as well as the "initial coin offering (ICO)" of network digital currencies, expanding After the application scenarios of bitcoin, the prices of "digital currencies" such as bitcoin and ether have started to rise rapidly, and their social impact has been expanding. Especially in 2016, including China, many national central banks announced that they would study and launch the “Central Bank Digital Currency (CBDC)” as soon as possible, making many people think that it is the new type of “digital currency” such as Bitcoin that has formed a huge amount of national sovereign currency. The shock forced the central bank to rush to launch its own digital currency, and therefore more convinced that “digital currencies” such as Bitcoin have great value. With the rapid rise of ICOs, the prices of digital currencies such as Bitcoin have risen sharply. 200 US dollars, has been rising to nearly $ 20,000 at the peak in November 2017.
During this process, mining and speculative coins became more popular in China, and they were at the forefront of the world, which also caused shocking risks. Because of this, the People's Bank of China took the lead to suspend the ICO ("9.4 Ban") on September 4, 2017, and subsequently stopped digital currency trading and liquidation of its funds, which severely hindered its development in China. But its global boom continued until it peaked in November. As more countries strengthen the control of ICOs, the price of Bitcoin has continued to fall from its peak in November, and by the end of 2018, it has basically hovered around $ 4,000. Such a large price drop could have alerted many people, but it was more interpreted as the result of hard supervision or suppression by central banks and other power agencies. The periodic decline did not represent its true value.
By 2019, more and more large institutions, including JP Morgan Chase Bank, Wal-Mart, and Facebook, have issued announcements, announcing that they will apply blockchain technology to the equivalent of fiat currencies, or structurally linked to a variety of fiat currencies. "Stable currency", which has once again stimulated people's enthusiasm for "digital currencies" such as blockchain and bitcoin, which is the first to apply blockchain technology. In addition, Bitcoin will usher in a new increase of half by May 2020 Many people began to increase their leverage to expand their positions before, pushing their prices to rise again. By the end of 2019, they had exceeded $ 12,000, and by the end of the year, they were basically hovering at the level of more than $ 8,000. In 2020, it once exceeded $ 9,000, and some people think that it is expected to reach a record high this year.
But contrary to expectations, the unexpected new crown epidemic has once again brought the price of Bitcoin back to its original form, and fully exposed that Bitcoin is simply not as strong as gold, has a strong hedge, and can become an important safe-haven asset. Finally, What can be hedged is still gold and the national debt and currencies of the most important countries.
In fact, although Bitcoin highly imitates the mechanism of gold, it is not real gold at all, but only digital "virtual gold" or "virtual assets". At the same time, this kind of total and staged output is completely set in advance, and the staged output is regularly halved. There is no room for regulation and control, making it difficult to correspond to the scale of tradable social wealth and the lack of a country. Sovereignty and legal protection, that is, the loss of guaranteed social wealth to use bitcoin for transactions, will inevitably make it difficult to maintain the basic stability of the currency value, completely violating the essential positioning of currency as a value scale and the basic logic of development and progress, and it is impossible to replace the country Sovereign currency becomes a real currency, at most it can only be a special virtual asset, or a business circle currency or community currency that can only be used within a specific range. They may become the targets of speculation, but their prices will inevitably fluctuate, and they have great financial risks. Even if a "stable coin" linked to a certain fiat currency is launched using blockchain technology, the same is true, it can only be a token. Designs that are structurally linked to a variety of fiat currencies (such as Libra) are themselves to create super-sovereign currencies, and even violate monetary logic. It is impossible to coexist with their basket currencies, and it is difficult to really launch and operate effectively!
It is based on in-depth research on currency. When Bitcoin and blockchain started to heat up in 2016, I made it clear that Bitcoin cannot become a real currency and replace fiat currency; the central bank cannot compare with Bitcoin and Ethereum. With the introduction of decentralized digital currencies, the "central bank digital currency" can only be the digitization of fiat currencies, focusing on replacing cash, and changes in issuance and settlement methods; the development of the blockchain must jump out of the bitcoin mining and coinage paradigm, Real focus on solving practical problems. In July and August before the promulgation of the "9.4 Ban" in China in 2017, based on the phenomenon of digital currency and blockchain frenzy at the time, two articles entitled "It is necessary to take a reasonable view of blockchain and digital coins" through the WeChat public account. The long text of "The digital currency must be accurately positioned and effectively supervised," strongly urged to strengthen the transaction of digital currencies such as Bitcoin, especially the supervision of ICOs, which has caused great shock (controversy) and widespread influence. Since then, it has been emphasized that the blockchain must be viewed rationally and effectively used, and network "digital currencies" such as Bitcoin and stable currencies linked to the equivalent of a single fiat currency cannot be the real currency. The release of the "Libra" white paper structurally linked to a basket of currencies on Facebook has made many people confident about its issuance and impact, and even believes that it may strengthen the international position of basket currencies such as the US dollar, which may have a huge impact on the yuan, and strongly appealed In the case that the RMB should be added to or encourage Chinese companies to issue similar digital currencies, the flag clearly states: "Libra is difficult to become a super-sovereign world currency, and it may not even be successfully launched."
Under the impact of this epidemic, the price drop of "digital currencies" such as Bitcoin should make people fully realize that they cannot become "digital gold", nor can they become strong currencies or safe-haven assets. The "digital currency" -like fantasy has been completely shaken out, and we have a sober and accurate knowledge of currency!
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