This newspaper (chinatimesnet.CN) reporters Zhao Yi and Hu Jinhua report from Shanghai.
Before the collapse of the stablecoin Terrausd, Bitcoin's last ** was $40,000, and the crypto market has been dark since then.
On December 4, Bitcoin, which had been dormant for 578 days, suddenly exploded, hitting 4The $20,000 mark, the largest increase in the day was nearly 7%, continuing to hit a new high since April 2022. As of press time, CoinMarketCap data shows that Bitcoin's latest ** is still stable at 4Above $10,000, it is now trading at 41,903$59, up 13 in 7 days3%, and the current market capitalization of Bitcoin has surpassed Tesla and Berkshire, entering the top 10 of the global asset market capitalization list.
The total market capitalization of cryptocurrencies has grown rapidly due to the overall upside. According to Coingecko data, the total crypto market capitalization is currently close to 1$5 trillion. Looking back at the year-to-date, Bitcoin has risen by more than 145%, but it is still far from its history** of nearly $70,000 in November 2021.
Crypto assets are still riskier investment assets, and the magnitude and speed of the rise and fall of assets** are significantly different from those of traditional assets. Yu Jianing, honorary chairman of the Hong Kong Blockchain Association and president of UWEB, told the China Times reporter that although in the case of the market, investors also need to learn from history, investment involves risks, and it is very likely that crypto assets can skyrocket, and even the value of some crypto assets may be zero in extreme cases.
Multiple positive factors are superimposed
According to CoinMarketCap data, as of press time, most of the top 10 cryptocurrencies by market capitalization, including Bitcoin**. Among them, Ethereum is now trading at $2235,97, up 1125%；Dogecoin is quoted at 0$09,011, an increase of 16 in the past 7 days28%。
In terms of derivatives, in the past 24 hours, a total of 100,000 people have been liquidated, and the total amount of liquidation is about 2600 million US dollars, of which 1400 million US dollars, short orders liquidated 1$200 million.
In response to this round of bitcoin, Yu Jianing believes that the crypto asset market is essentially the basic operation law of the financial market. Virtual assets represented by Bitcoin have grown by nearly 78% in the past and have reached the chip-intensive area of the last bull market, so it is not surprising that there is a wave of vigor in places with strong support.
The movement of crypto assets is equally closely related to the global financial markets. Yu Jianing said that as the Federal Reserve's interest rate hike is nearing the end, the market has expectations for the turn of monetary policy, which will also make some institutional funds deploy in the financial market in advance, so that all kinds of assets, including the United States, are available.
Yu Jianing also said that new narratives such as BRC20 have emerged in this round, which is extremely important for the development of Bitcoin. BRC20, as a token format developed based on the native Ordinals protocol of the Bitcoin network, shows the inevitability of the ecological development of the Bitcoin network to a certain extent, and also helps to promote the development of Bitcoin.
Wu Gaobin, vice president of the Integration Committee of the China Communications Industry Association, added to the China Times that from traditional banks to virtual currencies in the form of Palestinian-Israeli conflict sanctions, Tesla, Microstrategy and other well-known companies have announced their investment in Bitcoin, which has promoted the market's confidence in Bitcoin.
In addition, this round of Bitcoin is inseparable from the progress of Bitcoin spot ETFs. On December 4, Bitwise filed amendments to its S-1 registry with the U.S. Securities and Exchange Commission (SEC). BlackRock also filed a revision to its S-1** for its own ETF, iShares Bitcoin Trust, on the same day.
Bloomberg ETF analyst Eric Balchunas believes that there is a 90% chance that the SEC will approve one or more potential spot Bitcoin ETFs by January 10, 2024.
According to a research report published by Glassnode, there is a significant amount of pent-up demand for Bitcoin spot ETF products. Currently, the total AUM of the 14 Bitcoin spot ETF applicants is $14 trillion, and analysts believe that as much as $70.5 billion will flow into the crypto market with only a small allocation of assets, bonds, and investors. Even the more conservative** would have tens of billions of dollars coming into the market in the first few years.
A few days ago, Standard Chartered Bank (Standard Chartered) released a report saying that the spring of bitcoin has arrived, and bitcoin will reach a new high of $100,000 by the end of next year, with a range of more than 160%. Standard Chartered believes that Bitcoin's continued drivers include Bitcoin's continued dominance in the crypto space, further hoarding by miners, and the halving moment that will come early next year.
However, it is worth noting that the cryptocurrency represented by Bitcoin is affected by many factors, and often stages a "roller coaster".
Ayyar, vice president of international markets at crypto exchange CoinDCX, warned that if the Bitcoin ETF is rejected by US regulators again, the current rally could come to an end and continue**.
Invest rationally, don't blindly follow the trend", Wu Gaobin emphasized that crypto assets are highly volatile and risky. Cryptocurrencies such as Bitcoin can fluctuate significantly in a short period of time, causing huge losses to investors. In addition, the security risks of crypto assets cannot be ignored. The transaction and storage of cryptocurrencies rely on blockchain technology and encryption algorithms, but the security of these technologies is not absolute, and security incidents such as hacking attacks and phishing scams occur from time to time.
When investing in crypto assets, investors need to carefully assess risks and allocate assets reasonably, and at the same time, they also need to pay close attention to market dynamics and adjust investment strategies in a timely manner. Wu Gaobin said.
The crypto market recovered across the board in November
The reporter noted that in the past November, the recovery of cryptocurrencies expanded to the wider market.
According to data from The Block, venture capital in the blockchain space increased by 96% month-on-month in November, hitting a six-month high. According to the chart data, the total amount of financing in the blockchain space since November is 10900 million US dollars, of which the infrastructure sector accounted for the highest proportion, at 4$1.3 billion, or 379%。
Bitcoin's hash rate, a measure of the total amount of computing power that protects the network, reached an all-time high in November. Bitcoin miners' earnings have also continued to increase, with Bitcoin transaction fees reaching as high as $18 at one point in November 2023. On December 3, The Block Pro data showed that Bitcoin miners' revenue increased by 30 percent in November1% to 11$500 million, while ETH staker income grew by 257% to 1$5.8 billion.
At the same time, institutional funding is continuing to come in. On November 27, Coinshares released a weekly report saying that the net inflow of funds into digital asset investment products in the past week was 3US$4.6 billion, which has been a net inflow for 9 consecutive weeks, and the largest weekly inflow in the past 9 weeks.
In addition, data showed that open interest in Bitcoin** listed on the Chicago Mercantile Exchange (CME) hit an all-time high in November, which could indicate that institutional activity in the market is increasing. At the same time, exchange-traded products (ETPs), including U.S.** products and overseas spot products, saw net inflows in November.
The CME (Chicago Mercantile Exchange) Bitcoin** open interest in November was 40$200 million, with a monthly trading volume of 730$200 million, both of which are the highest since November 2021.
The NFT market has also ushered in**. According to CryptoSLA data, NFT sales on the Ethereum chain saw a significant ** in November, reaching about 3$4.9 billion, up from $1.9 billion last month$6.7 billion, an increase of 1628% and the highest since May 2023. In addition, the number of NFT transactions on the Ethereum chain reached 840,000 in November, and the total NFT sales on the Ethereum chain reached $4.2 billion so far.
In this regard, Yuan Shuai, deputy secretary-general of the Zhongguancun Internet of Things Industry Alliance, told the China Times that the development of the crypto market may continue to prosper in the future, but it is not limited to the cryptocurrency market as a whole rather than just the cryptocurrency itself. With the continuous maturity of blockchain technology and the expansion of application fields, at the same time, the recovery of the global economy and the popularity of blockchain technology will also provide more development opportunities for the crypto market. Therefore, I believe that the investment and financing situation of the crypto market and the NFT market are expected to continue to recover in the future.
However, it is worth noting that behind the prosperity of the crypto ecosystem, risks are also looming. According to the November security report released by SlowMist, a large number of security vulnerabilities appeared in the blockchain field in November 2023. A total of 47 different incidents were recorded, with a cumulative estimate of about 3$4.9 billion.
In November, the losses from the Polonex and Heco Bridge incidents alone amounted to 2$4.3 billion, or about 69% of the total loss of security incidents in November. There were 24 rug pull incidents, accounting for 51% of the total number of security incidents. SlowMist reminded that users should fully understand the project background and team before participating, and be cautious in investment choices, as the two incidents involving liquidity attacks caused a loss of about $54.99 million to the project operator.
In Yu Jianing's view, the crypto bear market in 2022 has seen a series of institutional liquidation crises, which can even be called a small Lehman moment in the crypto market, and the scale of funds affected is also in the forefront of the history of the crypto market, making the crypto assets represented by Bitcoin fluctuate violently. However, in the long run, this is not a good thing, allowing market risks to be properly exposed and cleaning problematic projects is more conducive to subsequent sustainable development.
Deleveraging is an excellent historical opportunity in the long run. Yu Jianing believes that according to the current situation, the most tense moment may have passed. In 2023, the macroeconomic growth rate of various countries will increase, and although the recovery is still weak, it still gives greater confidence to the crypto asset market and even the global financial market. In the future, the crypto asset market will continue to maintain high volatility, and it is not ruled out that there will be depth** in the future, but the long-term trend will continue.
Editor-in-charge: Xu Yunqian Editor-in-chief: Gong Peijia.