After Bitcoin broke through $41,000, the situation did not rise as expected. In the past two weeks, the market of Bitcoin has been fluctuating continuously, and it once fell below 300 million US dollars. Many people are not optimistic about this round of market, and the voice of Bitcoin is a bubble.

What is a bubble? A bubble is one whose existing value is higher than its actual value. Bubbles originate from speculation, which runs through the entire process of evolution from natural economy to commodity economy. The first speculative wave recorded in the world's financial history is the tulip bubble.

In the 17th century, tulips in the Netherlands once caused an unusual madness in the flower trading market. The supply of tulip bulbs was in short supply and the prices soared. The chain reaction caused the price of tulips to plummet, and thousands of people became bankrupt in the crash.

People do not buy tulips for their intrinsic value or for ornamental purposes, but expect their prices to rise indefinitely and thus make a profit. This idea of ​​always expecting that someone will be willing to bid higher has long been called investment. Bo stupid theory.

After analyzing speculation and bubbles, do you think there is a bubble in Bitcoin? There must be a bubble, and there must be speculative elements in buying Bitcoin, there is no doubt about it. However, what we should see is that the stock market, real estate market, crude oil, and bulk goods all have speculative elements in them. People enter the market one after another, mainly to obtain profits, but this also promotes economic development. To some extent, speculation plays a positive role in the development of social economy.

Bubbles in the stock market, property market, crude oil, and bulk commodities are known to everyone but not fearful, because they exist in reality and are actually visible. But Bitcoin is different. Bitcoin is generated by code and stored on the Bitcoin network. It is a valueless anchor asset. Its value comes from people's consensus. Once the consensus collapses, it will be worthless , but will the Bitcoin consensus collapse?

I think the possibility of this is getting smaller and smaller, and the value of Bitcoin has actually been recognized by more people. The value of Bitcoin, just as it was originally set to hope, its scarcity, divisibility and openness and transparency make its hedging properties prominent and more and more recognized.

More and more traditional investment institutions have joined the army of investing in Bitcoin. Massachusetts Mutual Life Insurance, an established insurance company in the United States, also announced that it has purchased $100 million worth of bitcoin. MicroStrategy Incorporated, a Nasdaq-listed business analysis company, started buying bitcoins on August 11, 20202. This buying could not stop. It bought bitcoins 4 times in a row, totaling 70,470 bitcoins.

The entry of traditional financial institutions and payment institutions has also given ordinary people the opportunity to get in touch with Bitcoin. DBS Bank of Singapore has also begun to build a bitcoin trading platform for institutional investors and qualified investors. American payments giant PayPal has announced that all account holders in the United States will be able to buy and sell cryptocurrencies, including Bitcoin, through its platform. This move will undoubtedly make it more convenient and safe for ordinary investors to buy Bitcoin, thereby further activating the activity of the Bitcoin market.

Many people think that there is a bubble because the price of Bitcoin is skyrocketing. In fact, this is not entirely correct. The most fundamental reason for the price rise of Bitcoin is that the global printing of money, we are in an era of unprecedented loose credit money.

Since March 2020, the Federal Reserve has been printing money frantically, and the growth rate of broad money in the United States has exceeded that of World War II, setting a record high. According to data, since March 2020, the scale of money printing by the world's major economies has exceeded the sum of the scale of human money printing in the 5,000 years of civilization history before 2008.

In fact, the currency is overissued, and the price rise caused by inflation has begun to gradually reflect. Russia, the world's sixth largest grain producer and the world's major grain exporter, is such a big grain country. The price of grain has also risen by 6% in a single month. This is actually very unreasonable. Why does this happen? The reason is that foreigners continue to buy food with US dollars.

With the release of water by central banks regardless of cost in 2020, we will soon usher in a global inflation, and the rise in prices is unstoppable. The rise in prices is not only reflected in food, meat is also rising, and it will continue to spread to other products. This situation will be more reflected in 2021.

In fact, in the current economic society, there are big bubbles everywhere on the investment road. It is actually a normal thing for you to encounter bubbles, and there is no investment without bubbles. If you are afraid of bubbles, then you will lose a lot of opportunities. The house price is too high, the bubble is too big, and the opportunity to buy a house is missed; the US stock market has been bullish for more than ten years, and it will definitely turn bearish, and the bull market of the US stock market has been missed; Car gone, bitcoins missed. We are always on the road of this fear bubble, farther and farther away from wealth.

In such an era of monetary easing, high-quality investment targets have almost broken all valuation systems and soared all the way. It can be said that it is a bubble or not. Bitcoin, an innovative form of digital asset, is regarded as a substitute for gold. It is an excellent investment target, and its price will rise sharply.

Some time ago, I saw a big guy in the community say, "Bitcoins under $30,000 may not be seen much." Looking at it now, this sentence may become a reality. With global inflation and the value of high-quality investment targets being admired, the price of Bitcoin may really not come down.

A project that no one pays attention to may not have a bubble, and certainly has no investment value. It is inevitable that Bitcoin has a bubble. As an excellent investment target, if there is no bubble, it will actually fail. The value of Bitcoin is driven by consensus. More and more people and more funds join in the bull market. The crazy and greedy consensus will continue to increase, and jointly promote the rise of Bitcoin. We are actually going to do it now The most important thing is to embrace the bubble of Bitcoin and follow this bubble to make money.