Volume 4 Crazy Growth 2017 Chapter 872
For several consecutive days, Bitcoin continued to heat up in the market, and the topic of Bitcoin became a hot topic in the global financial market.
Even before this, the central bank and seven other major departments jointly issued repeated orders to ban the circulation and trading of virtual currencies in the country.
This blockade, like the Seven Swordsmen's Slaying of the Tianshan Mountains, once dealt a heavy blow to Bitcoin's market value, causing its market value to be unable to recover . A large number of investors from China rushed to panic sell, causing its market value to plummet.
However, nothing is absolute. From another perspective, this is undoubtedly an opportunity to buy at the bottom. While the market value of Bitcoin has plummeted, a large number of low-priced chips have also appeared on the market.
For international hot money or retail investors in overseas markets, as long as they recognize the value of encrypted digital currencies, they will not miss such a good opportunity to take over.
The global financial market is indeed complex when it is said to be complex. The interests of all parties are intertwined and one move can affect the entire body. Any slight disturbance in the news may trigger market panic, and then cause an avalanche-like chain reaction.
Events like these have occurred countless times in the short few hundred years since the establishment of financial markets, and are not uncommon.
But sometimes, the market is simple. It is nothing more than a process of passing the flower while beating the drum. As long as there is always a buyer to take over, the flower will not fall to the ground.
Vice versa, if no one takes over, it means that the flower is in your hands, and its value may be greatly reduced and become worthless.
In the context of a market economy, this flower can be all-encompassing and can be anything, even if it is just a vague concept.
As long as the rules of the game are established and there are players willing to enter the game and pass the parcel, the game will proceed naturally.
Obviously, a ban from the Chinese government alone can only have a certain impact on the value system of Bitcoin, but it is impossible to shake its foundation.
This opportunity can even be used to prove the cryptocurrency system's superior risk resistance and its uniqueness that is difficult to ban at the technical level.
Even if the world's second largest economy prohibits its circulation in the country, it is still impossible to eliminate its existence on a technical level. This has instead become an important basis for verifying its core concept of "decentralization."
Based on this point alone, there are naturally many speculators willing to enter the market to take over and carry the sedan chair, especially the entry of a large number of institutions. Compared with the scattered soldiers in the market, well-trained institutions are always the main force in the market.
Although retail investors are often numerous and powerful, most of the time they are just a mob. Even if they occupy more than 80% of the market, they are often no match for the 20%.
Just as war requires ammunition, institutions naturally need chips to enter the market. After a period of collection, the chips gradually begin to be highly concentrated in the hands of some institutions, and the market value begins to rise accordingly.
Institutions that enter the market first and obtain chips will naturally be able to reap the benefits. However, as the market gains momentum and a bull market gradually emerges, latecomers who arrive upon hearing the news will naturally not want to be left out.
However, when the market is thriving, the future prospects are bright, and the market value is rising, the chips circulating in the market will naturally decrease visibly.
Especially after Bitcoin successfully reached 7,000 US dollars, its trading volume also quickly fell back to the normal range of 2 billion US dollars from a new high of 4 billion US dollars.
Moreover, the market value of Bitcoin is still rising further, fluctuating step by step in the range of US$7,600. It seems that it may accelerate again at any time and break through the US$8,000 mark.
In this case, the market's willingness to trade will naturally decrease. After all, everyone is optimistic about the future performance of the market and believes that Bitcoin will continue to rise, so naturally no one is willing to give up.
Whoever sells it is an idiot!
As for latecomers, seeing such a big piece of fat meat in front of them, but having no admission ticket, they cannot get a piece of the pie. This kind of anxious feeling is just like a beautiful woman posing in front of you, but there is a layer of bulletproof glass between you.
This is especially true for some institutions that want to enter the market.
However, there are always more solutions than problems. Since there are no chips, just create some out of nothing... The solution is also very simple. Just borrow chips from people who have them.
Especially for institutions that enter the market first and are ready to reap the benefits, they hold a large number of chips. It is naturally impossible for them to sell them, but they can borrow them. Anyway, they will just sit there and they can even collect some interest.
At any time, lending is a business that is sure to make a profit. After all, before lending, in order to prevent you from defaulting on the debt, collateral is always essential. If you really cannot pay it back, there is still collateral to make up for it.
The reason why one goes to so much trouble to borrow the chips, and pays high interest, is naturally not to keep the chips in hand and watch them, but to use them as an admission ticket to sit at the table and participate in the game.
After all, the rules of the game are there. Only with chips can you participate in the game. It's like if you don't have game coins, you can only watch from the sidelines.
Even if you have some fantastic operating skills in your mind and can easily complete the level with one life, you still have to put in coins to get started, otherwise everything is just fantasy.
Only when you have chips in hand can you have room for maneuver.
If the chips obtained at such a high price cannot generate excess profits, it will ultimately be a losing deal.
However, it is naturally difficult to achieve this by taking the conventional route. There is only one way, which is short selling.
As the Bitcoin market gradually matures, its asset neutral status has been widely recognized. Even the famous CME has launched Bitcoin futures, which has created sufficient market conditions for short selling.
The so-called short-selling process is roughly the same as mentioned above. In short, it is to sell high and buy low to make a profit from the difference.
Sell the high-priced chips, wait for the market price to drop to a certain range, then buy low-priced chips and return them, thereby earning the difference in price.
Although the principle is simple, it is undoubtedly extremely complicated in practice. It is like telling you that as long as the basketball is put into the basket, you can score points, and the higher the score, the win. Now you can go play in the NBA.
However, for retail investors, this is naturally a fantasy, but for professional institutions that make a living from this, it is naturally nothing special, it just comes with practice.
Especially the common operation of short selling is like common practice for those institutions on Wall Street that often play the role of big short sellers in the market.
In addition to professionalism, the sufficient funds in the hands of institutions are undoubtedly a major reason for their success in the market.
This is why institutions that occupy 20% or even less of the market can play the role of market leaders. Not only do they have sufficient ammunition, but they are also often one step ahead in understanding market news.
Sufficient firepower, we can hit whatever we want, and we are well-informed...
If two armies were to confront each other, the side that possesses the above elements would undoubtedly find it difficult to lose, unless the commander was a very smart person, such as... General Manager Gao Jian (funny).
Obviously, those who possess the above elements in the market are often institutions, while the other side is retail investors. Given such a huge disparity in strength, if given a choice, I am afraid no one would like to play this one-sided crushing game.
Mowing the grass is certainly fun, but as the one being mowed, there is naturally no gaming experience at all.
To this end, in order to maintain game balance, it is naturally necessary to establish some rules to restrict the former and protect the latter to thrive.
To a certain extent, the existence of rules is indeed a protection mechanism for leeks, and in this regard, looking at the global stock market, the A-share market is definitely the best, and those who understand will understand.
However, the Bitcoin market, which claims to be decentralized, has 24-hour uninterrupted trading and is unregulated, is like removing the shackles for the strong, allowing them to act more recklessly.
For the weak, perhaps it will remind them of the fear of being dominated...
In the market, there may be differences between bulls and bears, but they are not in an irreconcilable opposition. In the face of interests, bulls do not mind wearing the mask of bears.
After all, making money is not shameful.
As the market value of Bitcoin continued to soar and was about to reach the 8,000 US dollar mark, the sickle, which had been hungry and thirsty for a long time, quietly fell.
It was an ordinary day with bright sunshine and gentle breeze, but the weather in the market suddenly changed.
A large number of sell orders suddenly appeared, and highly concentrated chips began to dump the market. Bitcoin, which had once reached US$7,776.42 yesterday, fell sharply. The market was caught off guard and there were not enough buy orders to take over, and the market value plummeted instantly.
It fell all the way and dropped to US$7,000, and there was a trend of falling below the US$7,000 mark. However, as the short sellers intervened to dump the market, it was naturally impossible for the market to show a one-sided trend.
Whether it is retail investors who take the opportunity to buy at the bottom, or institutions that sit back and reap the benefits, at this moment they are playing the role of multiple parties, fighting a decisive battle with the bears in front of the US$7,000 mark.
The two sides fought back and forth, firing all the ammunition in their hands and having a lot of fun. However, in such a pitch-black battlefield, who could tell the difference between the enemy and the friendly forces?
After all, in this anonymous trading market, the only position is no position.
Therefore, when the bulls and bears were fighting back and forth, someone on the bull side suddenly took off his mask, revealing his true nature as a bear. He revealed his cards directly and threw out all the chips in his hand.
There is no such thing as bulls or bears; only interests come first.
Even if one is really optimistic about the future prospects of Bitcoin and is bullish on the market, it does not prevent one from taking advantage of this opportunity to rob and grab more low-priced chips. Short selling is just a means, and grabbing chips is the goal.
With many major institutions defecting at the last minute, it is natural for retail investors who are not aware of the situation to be easily led by the rhythm and follow suit in selling their chips, thereby further depressing the market value.
The wind direction of the entire market suddenly changed, and the 7,000 US dollar mark was instantly lost. The market value suddenly fell to 6436.87 US dollars. A big red negative line appeared on the market, which was extremely terrifying.
(Unlike the domestic market where green falls and red rises, the opposite is true abroad)
Even though Bitcoin’s value system has been established, we must know that any consensus is extremely fragile at the beginning, and it may fall apart in an instant once there is any disturbance.
Especially in this market where there is no trust at all, retail investors are completely powerless to resist whether it is intentional or unintentional.
As panic spreads, how many people can have the composure to hold on to their chips tightly and choose to stand guard in a high position?
Such determined people are always a minority in the market. The vast majority of people just follow the lead and sell off, fearing that they will be trapped if they are a step slower.
In this case, well-prepared institutions only need to open their bloody mouths in an orderly manner at a low level and eat the chips into their mouths one by one.
Over the past two days, the Bitcoin market has plummeted by more than -12.78%. As retail investors have fled in a stampede, the trading volume has hit a new high, reaching the US$5 billion mark.
However, there were so many jackals, tigers and leopards that such a small profit was certainly not enough to satisfy their appetite. So after reaching a preliminary consensus, they mobilized sufficient firepower, ready to pursue the victory and settle the matter once and for all!
On a dark and windy night, when murders and arson are taking place, institutions that have been gathering their strength come out in full force, forming a combined force to crash the market, ready to bite off a piece of meat from the hands of retail investors.
More than 1 billion US dollars in sell orders appeared in the market in an instant, which was so overwhelming that it directly created a big hole in the market, and the market value instantly fell below the 6,000 US dollar mark.
In the face of the well-prepared regular army, ordinary guerrillas are simply unable to resist. Apart from choosing to join them, the only option left is to surrender and lay down their arms.
The market value of Bitcoin once plummeted from US$6,625.05 to US$5,519.01, reaching the lowest point in this round of accelerated market in a month.
In an anonymous market with no limits on price fluctuations, watching Bitcoin evaporate by more than thousands of US dollars before your eyes is undoubtedly an extremely painful process.
For investors who entered the market at high levels, this is undoubtedly like cutting their flesh with a blunt knife. Even for investors who hold low-priced chips, it is naturally not a pleasant feeling to see the green dollars in their pockets disappear.
Every time you think you have hit bottom, the curve on the market continues to go down, as if testing your nerves, and then goes down again, as if there is oil underneath, digging down tirelessly.
As a result, no oil was found, but the mentality of many retail investors collapsed.
OK, OK, this is the decline, right? Give me back my money, and I won’t play anymore, okay?
As a large number of sell orders piled up on the market, the market value of Bitcoin showed a trend of falling towards US$5,000. For a time, many retail investors cried and screamed, unable to hold back any longer and chose to sell their chips.
When the sell orders pile up to a certain level, the well-trained short sellers move in unison, taking off their short masks and skillfully putting on long masks.
While canceling his own sell orders, he placed a series of buy orders instead, directly igniting the upward trend and sweeping up the stocks. In the blink of an eye, he had swallowed up a large number of sell orders in the market.
The downward trend that was originally like a landslide and tsunami stopped in an instant, as if it had bottomed out and rebounded, and the market curve instantly turned its arrow and rushed upwards!
