On May 16, amidst other virtual coin surges and plunges, bitcoin, which has recently seen its price tumble due to statements from Tesla CEO Elon Musk, began to stabilize and rebound. Today, bitcoin rose more than 3% intra-day and is back above $48,000 per coin.
On May 13, after Tesla CEO Elon Musk tweeted on the social media platform that Tesla was suspending payments in Bitcoin and considering using the less energy-intensive cryptocurrency, Bitcoin plummeted, with individual coin values falling by nearly $10,000 at one point within 24 hours. At the same time, virtual coin trading platform Cryptocurrency will also be investigated by the U.S. Department of Justice and the IRS, in what will be the third investigation it has encountered in two months.
On Tuesday of this week, the SEC’s investment management division issued a report saying that bitcoin is “very speculative” and urging investors to be aware of the risks of trading in bitcoin futures, as well as the risks of trading in bitcoin trust assets.
Earlier this month, cryptocurrency custodian New York Digital Investment Group (NYDIG) said that some U.S. bank customers will be able to buy, hold and sell bitcoin through their existing bank accounts. Previously, banks had refused to open their bitcoin businesses to individual customers until recently, when they planned to allow wealthy custodian clients to invest in cryptocurrencies. Holding bitcoin through existing banks will allow more people to hold bitcoin, expanding the reach of bitcoin.
The blockchain research team at Guosun Securities has emphasized since last month that Bitcoin exists as a core value anchor for the cryptocurrency market, thus supporting the value of the cryptocurrency market (just like central banks and governments support the credit of the real market economy). As the absolute core of the cryptocurrency world, Bitcoin’s true future potential is not limited to “digital gold,” but is the anchor of value for the cryptocurrency market.
He said that the distributed (decentralized) financial market that has emerged in the last two years, whether it is based on Ether, BSC or other similar projects in public chains, ostensibly the credit base of the ecology comes from the public chains’ base currencies such as ETH and BNB, but ultimately the anchor of value for the market is still Bitcoin. Stablecoins and other asset mappings (such as synthetic assets like stock passes) will serve as a bridge between the real world and the cryptocurrency world.
The blockchain research team at Guosheng Securities says that assuming stablecoin will become an important part of the real-world monetary system, real-world interest rates will have an impact on the cryptocurrency market, and in turn, the assets in the cryptocurrency market will react to the real world through synthetic assets.
Elon Musk, CEO of Tesla, who “shouts” about emerging cryptocurrencies such as dogcoin and shiba coin, understands this, and in February 2021 announced earnings data showing that Tesla has already gained $272 million in cash by selling some of its bitcoins. The digital currency arms race has already begun, according to the computer team at West China Securities. Tesla and Meitu entered Bitcoin and Coinbase went public to become benchmark events.
The China-Iraq comprehensive cooperation agreement signed in March focuses on the settlement of trade (including oil trade) in digital yuan, and the effective cross-border application of digital currency will effectively prevent interference with clearing operations, according to the West China Securities computer team.
As a domestic A-share market investor, Huaxi Securities computer team suggests paying more attention to the three main investment lines of central bank side, bank side and public side, which firmly prefers the leading midstream bank IT vendors. An extended thinking is that a big change brought by digital currency may be to rewrite the payment pattern of A/ T two strong, while banks are expected to return to the dominant position, the payment entrance will rebalance to the bank side to a certain extent, the reconstructed scene flow will also bring a new operational demand for the banking system, so the bank IT vendors working closely together are expected to benefit.
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