Bitcoin application and investment scenarios
1. The Bitcoin debate
The use and investment attributes of Bitcoin have long been a topic of debate among people inside and outside the industry. The debate on these two properties is not only academically meaningful, but also commercially meaningful, and is of great reference value to potential investors and holders of Bitcoin.
2. Looking at the usage scenarios of Bitcoin from the data
Recently, "Xinhuanet" published an article "Li Lihui: The virtual currency represented by Bitcoin is destined not to become a popular payment tool" by Li Lihui, the leader of the blockchain research working group of the China Internet Finance Association and the former president of the Bank of China. ".
This article, which to some extent represents the official point of view, analyzes and explains the trend and highlights of my country's digital economy innovation and development from several aspects.
Regarding Bitcoin in the article, there is such a description: "Virtual currencies represented by Bitcoin are too speculative, so they are doomed to be impossible to become a payment tool that is popular or able to enter public social life, or a so-called this form of currency".
This points to the huge hurdles Bitcoin faces when it comes to promoting real-life usage. Bitcoin is too speculative, and a direct consequence is that its price fluctuates too much against fiat currency. It is normal for a fluctuation of 10% or even 20% in a short period of time, such as a month or even a day.
The currency we use in our daily life wants its currency value (exchange rate) to be as stable as possible. If the exchange rate of the currency used in daily life fluctuates by 10% or even 20% within a month or even a day, then there will be inflation and everyone will panic buying Commodities, or the emergence of inflation, everyone is unwilling to shrink sharply in the liquidity of the consumer market.
So is there any real usage scenario for Bitcoin? Yes, and this scene is not small, but it is in the "dark net world".
According to the statistics of the blockchain security company Chengdu Lianan:In 2019, the use of Bitcoin on the dark web reached its highest point in history, and more than $1 billion of Bitcoin was used to engage in illegal transactions on the dark web. If calculated at a unit price of $8,000, there are nearly 125,000 Bitcoins Flows on the dark web.
Although this number only accounts for 7% of the total number of existing bitcoins in circulation (1.81 million), this volume should not be underestimated.
The figure below shows the histogram of the amount of Bitcoin transactions on the dark web from 2011 to 2019 by the blockchain analysis company Chainalysis.
From the figure above we find that,Except for 2018, the transaction volume in almost all other years has increased significantly. Since 2013 (excluding 2018), the annual growth rate has been almost 30% to 40% or even higher. The transaction amount of Bitcoin will reach 14 billion US dollars. Based on the unit price of 8,000 US dollars, the number of bitcoins traded will reach 1.75 million, which is close to 10% of the total circulation.
Therefore, the real large application market of Bitcoin is in the dark web, and the activities of the dark web will continue to rapidly promote the widespread use and spread of Bitcoin in "another world", although this is a phenomenon that no one wants to see , but it is a reality that has to be faced.
3. Current status of Bitcoin investment
Bitcoin began to plummet after reaching the peak of the last round of bull market in December 2017. It experienced a plunge throughout 2018 and a rebound in 2019, and then continued to fall. In the eyes of the public, such a market has exhausted the popularity of the market. Numerous funds were also locked up.
Under such circumstances, what are the real attitudes and actions of investors, especially institutional investors? We still look at the data.
Grayscale, the world's largest bitcoin and digital currency asset management company, recently released its 2019 annual report. The report shows that its investment in digital currency in 2019 reached 607 million US dollars, exceeding its total investment in 2013-2018 , bringing its cumulative investment across all products to $1.17 billion.”
The following figure shows the proportion of funds in various digital currency investments:
From the figure we can see that,In 2019, not only did the investment funds not be intimidated by the bear market, but they continued to increase their capital to buy digital currencies. The total investment amount of Bitcoin was close to 475 million US dollars, and that of Ethereum was close to 100 million US dollars. Bitcoin still firmly occupies the king position.
However, it is worth noting that compared with Bitcoin investment, the proportion of funds invested in Ethereum is higher, far exceeding other years, which shows that investors are also beginning to pay more and more attention to Ethereum.
The following figure shows the investment situation of institutional investors, compliant individual investors, pension funds and family investors in the field of digital currency in the fourth quarter and the whole year of 2019. The green bar chart is the fourth quarter, and the dark green is year round.
From the above figure, we can see that whether it is the whole year or the fourth quarter, the pace of large-scale entry of institutional investors is ahead of other types of investors. This shows that institutional investors are optimistic about this market as always, and are investing in this market with increased bets.
Taken together, these data clearly show thatOn the one hand, although the usage scenarios of Bitcoin are not what we like to see, it is also developing rapidly. On the other hand, investors, especially institutional investors, are still enthusiastic about investing in it. They are not afraid of the bear market and continue to be optimistic and increase their holdings .
