At the time of the bitcoin station of $50,000 / coin, JPMorgan analysts pointed out in the latest report that unless the bitcoin frenzy is moderately cooled and calmed, its record price of $50,000 will not last and will not continue to rise strongly.
Of course, this view, investors will wait and see.
According to JPMorgan analysts, the value of all bitcoin in circulation has surged to $900 billion from $200 billion in September 2020, and before the $700 billion jump, institutional investors invested only $11 billion in large trust and futures markets.
Bitcoin has risen sevenfold since March 2020, with a market capitalization increase of $700 billion since September 2020.
"Due to the relatively limited supply of mining a certain amount of new bitcoin based on 'miners', bitcoin holders charge a premium to the new bitcoin inflow into the market," JPMorgan chases the chase, "retail capital flows also amplify institutional flows, but as the global economy reopens, retail funds flowing into bitcoin may dry up, which is a major risk for Bitcoin." ”
Signs of increasing concentration suggest institutional investors jumping into the Bitcoin and crypto industries. Tesla spent $1.5 billion on bitcoin in January, Matercard issued a statement saying it would soon support "select cryptocurrencies" in the payment network, allowing more stores to accept them as payments; and the veteran custodian bank BNY Mellon announced that it would hold, transfer and issue bitcoin and other cryptocurrencies on behalf of its asset management customers.
Under this "bombardment", on February 16, Bitcoin rushed to $50584.85, and then touched $52621.84 in the 17-day session, hitting a record high. As of 12:45 Beijing time on February 18, Bitcoin was 52119.22, up more than 75% this year.
JPMorgan Chase & Co. said in the report that Bitcoin's real three-month volatility (i.e., the real price volatility range) is 87%, compared to 16% for the traditional safe-haven asset gold. Bitcoin's apparently high volatility relative to the price of gold poses an obstacle to the former's sharp rise, making it difficult to break through the current level of about $51,000. "But in the eyes of Bitcoin's proponents, this means that Bitcoin may pose a threat to gold's status."
Although Bitcoin is increasingly described as "digital gold," skeptics caution that it is too volatile to make a broad share of institutional portfolios.
While the market has speculated that more companies will join the bitcoin and cryptocurrency space under the leadership of Musk and other well-known institutions, institutions such as JPMorgan Chase and Wedbush Securities have pointed out that the volatile price of bitcoin may prevent other companies from following Tesla's move.
UBS warned in January to be aware of the risk of bitcoin falling below 0. "Due to regulatory measures and competition generated by the emergence of better designed versions, the value of cryptocurrencies is likely to go to zero. Investors who hold cryptocurrencies and therefore lose their assets. Gabriel Makhlouf, a member of the ECB's Governing Council, also warned bitcoin investors that they need to be prepared to "lose all their money."
In addition to the warnings about the Bitcoin boom, another cascading effect is that the focus and discussion of "Bitcoin and carbon emissions" has begun to heat up. Many mining institutions even publicly stated that environmentalists are determined not to buy bitcoin.
In terms of the environmental impact of producing Bitcoin, Bitcoin mining is truly environmentally unfriendly. "Mining" Bitcoin — the process of increasing the supply of Bitcoin — requires a lot of electricity to run the computers involved. Calculations by Alex de Vries, a Dutch economist and PwC analyst, show that the world consumes about 78 terawatt hours (TWh) of electricity per year for "mining", which is equivalent to the national electricity consumption of Chile' 20 million people.
Because of the need to run machines 24 hours a day, many "mining" companies have chosen locations where they have cheap coal-fired electricity, which exacerbates local pollution and leads to a huge increase in their carbon footprint.
The data shows that the carbon intensity of the Bitcoin network in 2019 was around 480-500g of CO2/kWh (the same carbon footprint as 780,650 Visa transactions), while the UK grid was around 250g/kWh. The amount of e-waste generated by Bitcoin has reached 10.71 thousand tons.
Bitcoin Mining Electricity/Chart Source: Cambridge Bitcoin Electricity Index
Even less "friendly" is the idea that De Vries added that 98% of Bitcoin miners may never be able to produce a block. "There are currently about 4 million mining machines active worldwide, and nearly 75,000 blocks can be produced in a year and a half, which means that less than 2% of bitcoin miners can produce a block to verify bitcoin transactions, while the remaining 98% of miners cannot produce complete blocks."
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