“No one knows where the culmination of this round of Bitcoin’s rise is.” A Wall Street hedge fund manager said to reporters with emotion.
As of 18:00 on April 2, the quotation of Bitcoin was hovering around 59,527 US dollars per month, and once broke through the intraday round of 60,000 US dollars, setting a record high of 60,190 US dollars per month.
In the view of Alex Kruger, an analyst of the virtual encrypted digital global market, behind this is Bitcoin ushering in new benefits. First, the Chicago Mercantile Exchange Group (CME Group) plans to launch a mini bitcoin futures contract on May 3, which will help reduce the risk of small and medium investors’ holdings while attracting them to enter the market, pushing up bitcoin investment demand; the second is the largest in the United States The crypto asset exchange Coinbase will land on Nasdaq on April 14th, indicating that the capital market’s pursuit of encrypted digital asset trading has further increased.
“These benefits have made Wall Street investment institutions have a foreboding that the US regulators’ supervision of encrypted digital assets seems to be loosening, giving them more confidence to push the price of Bitcoin to new highs.” He said bluntly.
Huobi co-founder Du Jun said that Bitcoin’s ability to stand above the $60,000 mark is also closely related to the increasing acceptance of encrypted digital assets by mainstream financial institutions. For example, the latest report released by JP Morgan Chase recently pointed out that the increasing availability of bitcoin futures derivatives has reduced its price volatility, which will encourage more and more investment institutions to include bitcoin in their investment portfolios. Once the private sector invests in bitcoin on the same scale as gold , The long-term value of the former will reach 13 trillion U.S. dollars, suddenly attracting more investment institutions to chase Bitcoin. In addition, Visa announced that it will allow the use of cryptocurrency USDT to settle transactions on its payment network, and PayPal has announced that it will allow American consumers to use their cryptocurrency to make payments at millions of online merchants around the world, which also enables Bitcoin to be used and used. Demand further expanded.
“This week the US government introduced a $2.2 trillion fiscal stimulus plan that has continued to heat up the US quantitative easing policy, which is also the core basis for supporting Bitcoin’s rise to new highs.” Du Jun pointed out.
It is worth noting that Bitcoin has set new highs successively, which did not make all investors cheered.
According to the latest data from Bitcoin Homes, in the past 24 hours after the Bitcoin site was listed on the Bitcoin site at $60,000 on the evening of April 1, more than 100,000 investors have liquidated their positions. The total amount of liquidated positions exceeded 3.732 billion yuan, the largest of which The exposing order was close to 52 million yuan.
“In fact, most liquidity investors are bullish on Bitcoin, but because they use 50-100 times capital leverage to invest, as long as Bitcoin has a 1%-2% correction during the rise, they will be unable to call for the margin. Forced liquidation.” An encrypted digital asset exchange person told reporters.
Du Jun said frankly that every time Bitcoin breaks through a new historical high, there will be varying degrees of callbacks to “digest” the previous gains. Therefore, investors need to control their positions and leverage risks in time, and pay close attention to the impact of the callback magnitude on their own investment security.
Drumming to pass fancy buying and rising arbitrage game
A Wall Street hedge fund manager involved in Bitcoin investment said that this time Bitcoin can successfully stand above the $60,000 mark and hit new highs. CME’s launch of the mini Bitcoin futures contract is undoubtedly “contributory”.
It is reported that the Chicago Mercantile Exchange (CME) plans to launch a futures product called “Micro Bitcoin” on May 3, and it is currently awaiting regulatory approval. The value of this “mini Bitcoin” futures contract will be only 0.1 Bitcoin, which is much lower than CME’s standard Bitcoin futures of 5 Bitcoins, and the mini Bitcoin futures will be based on CME’s Bitcoin reference exchange rate. (BRR) Cash settlement.
“The biggest advantage of this new bitcoin derivative is to help small and medium investors avoid the risk of holding positions and the risk of violent fluctuations in the price of bitcoin, which will help attract more small and medium investors to enter the market.” He frankly told reporters. This has driven many Wall Street hedge funds to rush to “arbitrage” the price of Bitcoin before small and medium investors enter the market.
It is worth noting that these Wall Street hedge funds boldly pushed up the price of Bitcoin, while also actively locking in the risk of price fluctuations through existing Bitcoin futures products.
Data shows that since this year, the average daily trading volume of CME’s bitcoin futures contracts has reached 13,800, which is equivalent to about 69,000 bitcoins traded in the daily futures market.
Behind this, there are also many Wall Street hedge funds that are using Bitcoin futures option derivatives to cash in gains.
Reporters have learned from many sources that many hedge funds have been buying options products that are bullish on Bitcoin since the beginning of this week, and some hedge funds have even bet that the price of Bitcoin at the end of April will stand at $83,000.
In the view of this Wall Street hedge fund manager who is involved in Bitcoin investment, this is more like a crazy gambling behavior-data aggregation website Skew conducts statistical estimates on the execution price data of Bitcoin futures options contracts that expire on April 30 It is found that most institutional investors involved in bitcoin futures and options trading believe that the probability of bitcoin prices exceeding $80,000 at the end of April is only about 6.2%.
“However, these institutions that dared to bet that Bitcoin touched $83,000 at the end of April also have their own confidence.” Alex Kruger analyzed. First, the current Bitcoin balance of encrypted digital asset exchanges is declining, indicating that more and more investment institutions and investors are increasing their positions in Bitcoin. Second, the price of Bitcoin has now entered a certain fixed pattern-as long as there are new ones. If a large number of institutions enter the market, there will be a round of rise in Bitcoin.
The data obtained by the reporter shows that the current global investment institutions hold more than 800,000 bitcoins, accounting for about 4.3% of the total bitcoin supply. And many hedge funds believe that these two values will double in half a year.
“Bitcoin is now entering a stage of a fancy buying and gaining profit game. As long as there are new benefits, the market will expect a large number of new investment institutions and investors to enter the market, and every new investor and Investment institutions believe that they will not be the last to pay the bill.” The aforementioned Wall Street hedge fund manager involved in Bitcoin investment pointed out.
High leverage triggers the chasers to “recognize the loss”
At the time when Bitcoin stood at the $60,000 mark, more than 100,000 investors could only accept the bitter pill of losing out.
“Obviously, this is the fault of high leverage investment.” The above-mentioned encrypted digital asset exchange person said bluntly. In order to maximize the gains from buying up Bitcoin, many aggressive investors use 50-100 times capital leverage and chase up the whole position. Once Bitcoin suddenly pulls back 1%-2% during the rise, they are extremely vulnerable to liquidation. .
He frankly said that the entire exchange was a little helpless. They have repeatedly warned investors to pay attention to the large correction risk in the process of rising Bitcoin to new highs and not to use excessive leverage and control position risks. However, in the face of Bitcoin rising to new highs, many investors still choose the most aggressive Even individual investors are looking for friends to borrow money and continue to use a hundred times leverage to chase up Bitcoin.
The reporter has learned from many sources that a number of encrypted digital asset exchanges are planning to recommend highly leveraged investors to use mini bitcoin futures derivatives to hedge against the violent price fluctuations of bitcoin and the risk of holding positions. However, this has not worked well. First, some investors believe that it will weaken the gains of buying up bitcoin. Second, they have concerns about futures derivatives and believe that it has a higher risk of liquidation.
“Therefore, investor risk education still has a long way to go.” The aforementioned encrypted digital asset exchange person pointed out. Since the beginning of this week, as the US government launched a new round of infrastructure investment plans, the market’s expectations of inflation and the Fed’s continued loose monetary policy have once again heated up, and many investors have adopted a hundred times leverage to chase bitcoin. In this regard, they are reminding these investors that they should not only see the benefits of the new fiscal stimulus plan, but also pay attention to the possibility that it may cause U.S. Treasury yields to rise again, causing Bitcoin prices to undergo a sharp correction in the process of rising.
“Recently, the negative correlation between Bitcoin and U.S. Treasury yields is rising.” He emphasized. When the 10-year U.S. Treasury yield exceeded 1.7% on March 31, the price of Bitcoin fell from 59,500 US dollars to about 57,000 US dollars, causing more than 150,000 investors to liquidate their positions. The total amount of liquidated positions exceeded 6.2 billion yuan. The largest liquidation amount reached 14.68 million US dollars, equivalent to 96.18 million yuan.