Bitcoin’s Big Brother Position Shaken? Where is the logic of the recent cryptocurrency spike?

The burst continues, but Bitcoin is not working?

Bitcoin's Big Brother Position Shaken? Where is the logic of the recent cryptocurrency spike?

In the cryptocurrency world, there was once a commonly held view that Bitcoin is the weather vane for all digital currencies to rise and fall. If Bitcoin is bullish, other digital currencies will follow; if Bitcoin is bearish, a lot of currencies will not be able to escape the fate of falling.

However, in recent times, the digital currency market has shown a “magical development trend”: bitcoin is falling, but on the contrary, other digital currencies are not affected by bitcoin at all, the momentum of the rise is still fierce, completely not according to the rules.

Does all this mean that the authority Bitcoin has maintained over the years is no longer secure? What is the logic behind the recent spike in cryptocurrencies?

The cryptocurrency surge continues, but only Bitcoin is missing?

Bitcoin, which has always been known for its firmness, fell by 8 percent on May 5.

But at the same time, several other popular digital currencies rose rather than fell. On the same day, ethereum saw its price rise by nearly 13% in 24 hours, and dogcoin rose by as much as 40%.

Yearn Finance, which has been in the limelight since last year and is known as “the leading aggregator of DeFi applications”, also performed very well in this wave. Its governance token, YFI, rose by 24% in the last 24 hours. The YFI’s user base has been relatively stable, always concerned about increasing holdings, and the amount of locked positions continues to increase. In this way, the market has been upholding the “bullish” consensus on YFI.

As the saying goes, there is no contrast, there is no harm. Compared to the excellent performance of other digital currencies, bitcoin’s answer in this quiz is a bit gloomy.

It’s not that it’s not good, but maybe it’s just that it’s not good at high places.

Bitcoin’s market has stagnated, and many people have begun to criticize its value and performance. In fact, it is more important to figure out the logic behind this than to spit it out.

Bitcoin has been around for 12 years. It’s been around for 12 years, and as the oldest in the world, it’s been a long time coming. 12 years of time has allowed everyone to recognize bitcoin, and the value and meaning it carries is getting heavier and heavier.

Today’s bitcoin is not a “loser’s coin” that can be used to exchange for pizza, it has already achieved the phoenix nirvana. According to relevant data, the current valuation of bitcoin is more than 1 trillion dollars, the price is close to 6w dollars a piece.

Obviously, such high prices are no longer suitable for retail investors to hold and operate, and bitcoin has long become a veritable high roller.

In addition, the reckless days of digging out bitcoins single-handedly by oneself will also be over. Major institutions and capital parties are planning ahead and have started to scale into the game.

By the end of 2020, according to incomplete statistics from related media, the bitcoin held by foreign trusts, public companies, cryptocurrency trading, governments, and cryptocurrency projects add up to 47.9% of the current bitcoin supply that Wall Street already controls. Some experts even point out that Bitcoin and some other popular mainstream digital currencies have long been lumped together as an “institutional asset class”.

The big institutions have entered the market and are sitting on a huge amount of bitcoin, so retail investors have become “out of touch” with bitcoin.

As mentioned earlier, Bitcoin is currently estimated to have reached over $1 trillion, which means that the room for it to skyrocket is very small, and miracles such as “skyrocketing 10x” and “becoming a 100x coin” are almost impossible to happen to Bitcoin. The company’s success has been very limited.

Being on top of the cryptocurrency world doesn’t mean that Bitcoin can rest on its laurels, independent of any negative events. “The greater the ability, the greater the responsibility,” and any slightest breeze in the cryptocurrency world could cause bitcoin’s market to fall.

According to a May 13 report by Bloomberg, the world’s largest crypto exchange, Coinan, is under investigation by the U.S. Department of Justice and the IRS. The report notes that “officials investigating money laundering and tax violations have sought information from individuals with knowledge of Coinan’s business.”

As a result of this news, Bitcoin took a direct short term dip of $1,950, hitting a low of $48,400, with an overall intraday drop of more than 1%.

And as a result, retail investors began to look for alternatives. New cryptocurrencies with low valuations and low prices but strong consensus are entering the mainstream.

If it will skyrocket, it will plummet. Coin speculation is risky, and investment requires caution.

Dogcoin is the hottest and most powerful platform coin at the moment. The dog coin, which originally only had a market value of $1 billion, jumped to $4 billion under the strong support of a group of bigwigs represented by Musk.

But this is just the beginning. With the support of many retail investors and big V, the market value of dogcoin directly doubled more than ten times, standing at $40 billion, and finally soared all the way to exceed $80 billion.

At the same time, it also suffered a lot of criticism.

If you look into the matter, you will find that dogcoin does not have any absolutely superior core advantages, and its bullishness relies heavily on the “shouting support” of the coin circle’s big V and enthusiasts. If one day, these voices disappear, dogcoin will lose its reason to stand firm. The “animal tokens” derived from dog coin: Shiba Inu coin, Akita dog coin, piggy coin, etc., all have similar shortcomings and drawbacks.

In a nutshell, the current “cottage coin boom” represented by dogcoin is probably the result of capital expansion and the rapid rise of the community under the bull market, which has a hint of irrationality in any way. For this type of digital currency, it is recommended that you make a short term investment in a small amount to test the waters, but the risk of holding a large amount for a long time is really great and requires caution and prudence.

If you want to do a long term and larger amount of investment deployment, do not always think about the “myth of overnight riches”, be sure to remember two words: stability.

Whether the strength of the enterprise, the project itself is promising, whether the stock index performance is stable, whether the financial data is true and excellent, whether it is really rooted in the industry, whether there is enough professionalism, these are the issues that we need to think about before formal investment.

We might as well illustrate this point through an actual case in the circle. I’m sure we all remember the big news in February of this year, when “Bit Mining completed its acquisition of”.

The news of the acquisition was a sensation, but as the saying goes, “the road is long, the day is long”, and the future performance and development is the core and focus of investors’ attention.

Bit Mining (NYSE: BTCM) announced this week’s earnings data is a good illustration of this point. According to its publicly available data: In the first quarter of 2021, Bit Mining’s net income increased 532.3% year-over-year, and as of May 10 it had mined 147 bitcoins, with daily production of up to four. This doesn’t include the 356 coins received from Good Luck Info, which, even at $50,000, are worth more than $20 million in total. This also illustrates the huge mining potential of Bitcoin Mining, which has a full-scale mining machine, hydroelectric mine, mining pool and mining machine manufacturing business. This is supported by another piece of news on Wednesday: Bit Mining was included in the MSCI China Small Cap Index of stocks, indicating that investment institutions are also bullish on its growth potential.

Thus, it’s easy to see that Bit Mining, which has just completed its acquisition, is a first-timer in the cryptocurrency world, but has delivered a pretty good first report. Whether it’s good for the cryptocurrency market or the stock market, it’s all good.

Of course, it remains to be seen whether the subsequent development of the bit mining industry remains strong, but we follow this idea to screen and examine investment projects, it is right.

Bitcoin hegemony is no more, and the old cottage coins are rapidly soaring. Nowadays, the cryptocurrency circle seems to have entered the unprecedented “Spring and Autumn Warring States” era. You can seize the opportunity to fully enjoy the benefits of the bull market. But at the same time, you should also be vigilant and watch out for any possible dangers and bubbles that may come.

Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

Like (0)
Donate Buy me a coffee Buy me a coffee
Previous 2021-05-14 20:40
Next 2021-05-14 20:48

Related articles