2020 Bitcoin Full of Opportunities and Challenges

中本咖喱

特邀专栏作者

2020-01-07 14:09 (UTC+8)

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2019 is the year of the Sino-US trade war, and 2020 is the year of "love you, love you" by netizens. I don't want Iran and the United States to start falling in love and killing each other on January 3. The "roaring 2020" is here. On January 3, Bitcoin rose in a straight line, from $6,800 to above $7,800, with an increase of more than 15%.

Protests are underway around the world in India, Iraq, etc., and the economic crisis is spreading everywhere. Forecasts of a global economic collapse have plagued political discussions and media for months.

The way political turmoil affects the financial world is difficult to quantify, however, the interconnected nature of politics, government and finance tells a story of interdependence. As we head into the New Year, it is important to consider the current state of affairs and how upcoming known, known and unknowable events will affect the world economy and investment portfolios.

Additionally, the turmoil and changes currently taking place in many parts of the world seem to be having some impact on the cryptocurrency market. Bitcoin and cryptocurrencies are only a little over 10 years old, and the way political events affect cryptocurrencies is not as well studied as traditional assets and financial markets.

As crypto entrants head into 2020, analysts are trying to put cryptocurrencies in broader historical context and try to make sense of what might happen to cryptocurrencies due to political trials, expected and unexpected shifts.

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BTC and cryptocurrencies are risk assets/safe haven assets

Bitcoin’s relationship to political unrest is largely attached to its environmental status as a so-called “safe haven” asset, or an asset when another asset, such as a country’s fiat currency, can be used as a safe place to store value – is rapidly losing value.

For most people in the developed world, Bitcoin and other cryptocurrencies, whose volatility is known around the world, will be nothing. However, in countries experiencing economic crisis such as Venezuela and Zimbabwe, BTC is considered a popular option for protecting savings: easy to acquire, easy to store and easy to sell.

Sukhi Jutla, co-founder and COO of blockchain-based gold jewelry platform MarketOrders, explained to Finance Magnates: “Political turmoil usually shows a loss of confidence in the country’s government authorities. The government is closely tied to the existing financial system. connected, and thus have a negative impact on the financial landscape.”

"Political turmoil tends to disrupt the existing financial system, and in that regard, you also tend to see housing prices plummet," Jutla said. Affected assets, cryptocurrency prices tend to rise.”

What are these assets? Monica Eaton-Cardone, chief operating officer of the international cybersecurity company Chargebacks911, also pointed out to Finance Magnates, “Historically, when countries enter periods of chaos, conflict and uncertainty, alternative The popularity of the currency goes up."

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Cryptocurrencies are Tech Gold

As an easily portable and often valuable asset, cryptocurrencies are technological gold. It's more portable than diamonds or coins, and for many investors, it's a very attractive way to diversify.

But aside from being a newer asset, bitcoin and other cryptocurrencies don't yet have the same cultural significance and practical use as gold and jewelry. Critics point out: Gold, diamonds and precious metals have always had intrinsic value beyond pure value. For example, diamonds represent eternity and are indestructible; gold represents power and is unattainable. Rare earth metals are increasingly used in high-tech devices, and beautiful jewelry has always been highly valued,

Cryptocurrencies, by comparison, may help diversify your portfolio, but that's where the diversity ends. It's not like gold or diamonds. Cryptocurrency is what it is, it cannot be more than that. It's more like an idea than a physical object.

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Emotion determines the value of cryptocurrencies

Uncertainty and a lack of confidence could drive capital out of struggling economies and into cryptocurrencies, but the exact impact is difficult to measure.

Taking the U.S.-Iran conflict on January 3 as an example, is the surge in Bitcoin related to the U.S.-Iran conflict? Many people will answer yes, because Bitcoin has hedging properties. James Gong (co-founder of LongHash) published an article, in which he stated that the phenomenon described by many media in the past that the price of Bitcoin has skyrocketed due to the crisis in Iran does not seem to be in line with the actual situation. Based on the real exchange rate in Iran, the price of Bitcoin does not seem to be much different from the global average price of Bitcoin, and may even be lower than the average price. According to the current trading volume of LocalBitcoins in Iran, it is almost the lowest point in history, almost no transactions, so a small number of transactions are not representative. Even judging from Google Trends data, Bitcoin does not seem to have aroused additional enthusiasm among the public. Therefore, we have no reason to believe that Bitcoin has been sought after in Iran because of this incident, and it has aroused people's enthusiasm for buying.

The global Bitcoin price has indeed rebounded, and it is very consistent with the timing of the Iranian crisis. It cannot be ruled out that there is a certain correlation. How will the future develop and whether there is more correlation between Bitcoin and the global crisis? Sex, but also need to rely on time to prove.

Under the depreciation of the national currency, uncertainty and lack of information promote capital flight from the distress. The reason for not seeing more fleeing money flowing into cryptocurrencies has to do with the difficulty of using them, the extreme volatility in their value. This attribute is in contrast to other methods of ensuring savings and investment value. Ultimately cryptocurrencies are just one of many ways capital can flee, and capital flight inflows do affect prices, but it’s just one of many variables that affect cryptocurrency prices.

Market views are time-sensitive and will be adjusted at any time due to adjustments in disk operations.

If you want to invest in Bitcoin but haven't found an effective profit method, or you have stockpiled spot but don't know how to use contracts to hedge risks, or you like Nakamoto Curry's humor, welcome to communicate.

Don't worry about having no confidants on the road ahead, but there are friends on the investment road. I am Nakamoto Curry (BTC6668888), and I am willing to stand with you through thick and thin!

market analysis

BTC

After Bitcoin pulled back to around 7480 last night, it was unlikely to fall any further. This morning it pulled up again to around 8000. At present, from the perspective of trading, it should still be on the long side, so it is safer to buy low, but around 8000 It can be used as an ultra-short-term high throw point.

ETH

The trend of Ethereum is the same as that of Bitcoin. At present, it should still stand on multiple sides, and the current price of Ethereum is near the node, so the whole pressure needs to be relieved here. The short-term needs to be called back. It is safer to place orders at low prices.