Bitcoin is crazy again!
At 9:30 pm on March 10, Beijing time, the United States announced that the February seasonal adjustment CPI, up 0.4% month-on-month, expected to rise 0.4%, and the previous value rose 0.3%. After this data was released, the U.S. stock futures rebounded across the board, and the U.S. Treasury yield gains narrowed. And the craziest thing is Bitcoin. After the above data was released, Bitcoin accelerated its upward trend and exceeded US$56,000. In the past 24 hours, more than 85,000 people lost their positions.
From the news perspective, according to Xinhua Daily Telegraph, the Russian military has also recently mined Siberia . According to a previous report by China Merchants Securities (Hong Kong Stock 06099), the price of Bitcoin is a mirror image of currency. The higher the international liquidity level, the higher the price of Bitcoin will be. Moreover, the price trend of Bitcoin is ahead of A shares to a certain extent. So, when Bitcoin once again reached its previous high, can it guide A-shares to rebound again?
Bitcoin surges = expectations of water release continue?
The most important data in the world is the US price index. The data came out at 21:30 on Wednesday, Beijing time. The US CPI after the seasonal adjustment in February rose 0.4% month-on-month, with expectations rising 0.4%, and the previous value rose 0.3%; the core CPI without seasonal adjustment in February rose 1.3% year-on-year, with expectations rising 1.4%, and the previous value rose 1.4%; the CPI without seasonal adjustment in February rose 1.7% year-on-year, with expectations rising 1.7%, and the previous value rose 1.4%.
After this data was released, some institutions said that due to the improvement of public health conditions and the gradual increase in demand for services such as air travel, the US CPI rose steadily in February, recording the largest annual increase in a year, but potential inflation remained moderate. Since the data did not exceed expectations, the pattern of global asset prices changed in an instant. International oil prices rose rapidly, the US dollar index plunged, the 10-year U.S. Treasury yields narrowed rapidly, and the U.S. stock index rose across the board before the session.
The most exciting thing is still Bitcoin. After the above data was released, Bitcoin quickly exceeded $56,000.
According to Bitcoin Home data, 277 million funds were in liquidated in the past hour, and nearly 85,000 people were in liquidated in the past 24 hours, with the loss exceeding 3.7 billion yuan! Among them, the largest liquidation receipt occurred when MXC-BTC was worth US$4.48 million (about RMB 29 million).
Zhang Xia of China Merchants Securities believes that Bitcoin is a mirror of the currencies of major economies around the world, or the mirror of the G7 currency. When encountering common crises such as subprime mortgage crisis and COVID-19 crisis, the supply of G7 currency will increase significantly, which will depreciate relative to Bitcoin, and Bitcoin will appreciate in US dollars. This is the basis for Bitcoin’s pricing. Judging from the current situation, the market seems to be still expecting a looser monetary policy.
JOE PERRY, an analyst at Jiasheng Group, said that the market may be included in the ECB's expansion of bond purchases, verbally suppressing interest rates and exchange rates on Thursday.
Russian military entered the market?
In fact, the number of super players in Bitcoin is also increasing. This is related to countries with abundant oil resources, because electricity is cheap there.
Xinhua Daily Telegraph News According to the Russian Ministry of Defense " Red Star TV ", a hydropower station near Irkutsk, Siberia is hidden in a huge cryptocurrency mine. Siberia is cold all year round, and the local cold climate can be as low as minus 40 degrees Celsius. It is one of the coldest places on the earth. It can provide good heat dissipation conditions for large "mines" under the supervision of the Russian army with thousands of "mining machines". At the same time, the water and electricity costs here are low, which can greatly reduce mining costs and maximize the interests of "mining owners". It is said that this huge "mining" is jointly operated by the Russian army and private investors.
According to Bloomberg's report earlier this year, Bitcluster, a Russian company, mines Bitcoin in Norilsk, a Siberian city located above the Arctic Circle. The company's co-founder Vitaly Borschenko said that the Siberian polar regions are 25% cheaper than Russia's power grid, and Norilsk can create its own electricity through natural gas and hydropower, and the company gets electricity at prices as low as 2.75 rubles (about 0.039 USD per kilowatt-hour).
In addition to Russia, Iran may be more dependent on Bitcoin.Late last year, the Iran Daily, the official Iranian government newspaper, reported that as the country's normal use of hard currency has grown, the government revised its cryptocurrency regulations to make digital assets dedicated to imported goods. This means that Bitcoin and other cryptocurrencies formally mined under government supervision will have to be directly supplied to the Central Bank of Iran (CBI) within the authorized limit, and the limit depends in part on the amount of subsidized energy used by miners. Iran has abundant oil reserves and relatively cheap electricity, which can provide miners with substantial subsidy power and offset most of the cost of mining cryptocurrencies such as Bitcoin for companies that follow the rules.
Since May 2018, the United States has imposed about 800 economic sanctions on all levels of Iran's economy, causing damage to its economy worth $1 trillion, which may be the main reason why Iran has mined coins. In a report cited by the semi-official Iranian news agency Tasnim showed that the current daily trading volume of Iran's cryptocurrency continues to increase. Tasnim reported that the number of active investors in the local cryptocurrency market in Iran has exceeded 1 million, adding that a total of 20 platforms have reached 50 trillion riyals (US$200 million), which mainly come from Bitcoin.
Like Iran and Russia, Venezuela, which is deeply sanctioned by the United States, has long participated in the mining of coins. Venezuela is also rich in oil resources and has a very low power cost.
Can this time guide A-shares to rebound?
Bitcoin is of no use to hold Bitcoin in a few countries and regions that can be used as payment functions. So why has the price of Bitcoin been rising, including the recent investment in Bitcoin by Tesla?
Zhang Xia said that the total asset size of central banks in Europe, the United States and Japan can explain 67% of the changes in Bitcoin price after 2015. Other factors affecting Bitcoin price include trust, mining efficiency, halving mechanism, global government regulatory policies for Bitcoin, etc. In addition to Bitcoin, RMB assets can also be used as a tool for to hedge against the over-issuance of G7 currency to a certain extent, especially when the People's Bank of China is very restrained or tightens the money supply ahead of schedule, the RMB is a better tool for hedging against the G7 currency. Considering volatility, there are also many investors with high risk appetite who will buy FTSE A50 index futures on Singapore in hopes of higher returns. From the perspective of financial attributes, the correlation between Bitcoin price and A50 index futures becomes higher.
Compared with FTSE A50 index futures, Bitcoin has no underlying assets and Bitcoin has no use value. Therefore, Bitcoin is a relatively purely reflective of liquidity. FTSE A50 ultimately used the price of the A50 component as the basis for delivery, and the price of the A50 component is priced on the A shares. Although foreign investment has a certain impact, it mainly depends on the pricing of the A50 component shares by domestic investors, and is affected by the profits, domestic liquidity and risk preferences of the A50 component stocks.
From this perspective, Bitcoin reflects changes in global liquidity more quickly, while A50 is relatively lagging in response to fundamentals. Therefore, in history, the price of Bitcoin has a certain leading effect on the A50, and the price of Bitcoin has predicted the sharp drop in A-shares many times in advance, including after the end of 2017, A50 peaked one month after the sharp drop; Bitcoin plummeted in November 2018, and A50 underwent the last round of major adjustments in the following month; in March 2020, when A-shares emerged from the epidemic and showed a significant rebound, Bitcoin fell sharply, and then A50 fell sharply, and then A50 fell sharply; and the most recent time, after Bitcoin fell by 20%, the A50 index also pulled back by nearly 10%.
Jianghai Securities believes that the risky assets represented by the stock market are still weak, and the capital market has remained relatively loose under the care of the central bank, which provides a relatively friendly environment for the bond market, and the risk of interest rate upward is limited. However, the hidden worries of rising inflation and the approaching supply pressure have made the market cautious sentiment still exist, resulting in a lack of motivation for further downward trend in interest rates. Therefore, in the short term, the pattern of narrow interest rate fluctuations will likely continue, and the market pattern with stronger allocation than trading will remain.
This article is from brokerage China
