Last night, when the world's first "bitcoin fund" went online, the price of bitcoin was once again approaching the all-time high of $65,000.
With the U.S. Securities and Exchange Commission (SEC) officially approving bitcoin futures ETFs, it means that shareholders around the world will subscribe to "bitcoin funds" as if they were buying funds.
If wall street before represented the financial regular army, the coin circle represented the financial rebels, then now, they have begun to have you and me, I have you, and it is stamped and certified by the "Wall Street Civil Affairs Bureau".
Some US media said that the birth of the Bitcoin ETF marks that the currency circle has finally opened its doors to Wall Street. I want to laugh when I see this argument. Bitcoin ETFs have been vetoed countless times by regulators (especially the SEC) in various countries in the past few years, and now they are hard to blend into the circle, how can they float up?
It should be said that the timing of the approval of the Bitcoin ETF is crucial. Last week, the unit price of Bitcoin once again broke through the $60,000 mark, and the total market value exceeded $1.1 trillion, even higher than the market value of Facebook and Tesla, which is a very good investment form.
At present, the total market value of cryptocurrencies in the world is about 2.5 trillion US dollars, and at the beginning of this year, this figure was only 900 billion US dollars, which means that more than 1.5 trillion US dollars of assets have appreciated in more than half a year.
You know, the Biden administration's COVID-19 bailout plan approved by the US Congress in March this year totaled only $1.9 trillion. In other words, the total amount of money flowing into the currency circle this year is close to the total amount of water released by the Biden administration for the first time.
As the saying goes, Qiao Ben will have his heart set on the bright moon, but the bright moon will shine in the coin circle.
As I said before in the article "The Coin Circle Has Played a Big Game", since the outbreak of the new crown epidemic in the United States, the US stock market has become a reservoir of the US dollar, and the coin circle has become a reservoir of us stocks. In other words, the coin circle has become a secondary reservoir of the US dollar.
Wall Street's attitude toward Bitcoin has also undergone some dramatic shifts over the years. Some people have been very contemptuous of Bitcoin from the beginning, believing it to be worthless.
For example, Wall Street and even the world's most powerful financial institution JPMorgan Chase, its star CEO Jamie Dimon is an example, the old Dai and Buffett, has been singing the decline of Bitcoin, to this day he still thinks that Bitcoin is purely "nonsense", but the transformation of this big guy is that although he still believes that Bitcoin generation can never replace the dollar's coin issuance status, but as an asset target, it is not impossible to trade like other financial investments. Who can't live with money?
Behind this shift is Wall Street's growing bondage to Bitcoin.
According to statistics, if you add up the bitcoin held by trusts, listed companies, governments, and digital currency projects, Wall Street has held 47.9% of the bitcoin supply at that time by the end of 2020.
If the previous recognition of Bitcoin by Wall Street institutions was a "physically honest" civil act, then the US Securities Exchange's recognition of a Bitcoin futures ETF is an official act. Because the SEC itself is a quasi-judicial body directly under the U.S. federal government, it is headquartered in Washington. In a sense, the four words "for skywalker" on the Flag of the currency circle have become "relief for the White House".
Why?
Historically, the U.S. government has tolerated domestic inflation to less than 2 percent per year. However, since the founding comrades released water last year, coupled with Biden's fearlessness, inflation in the United States is currently close to 6%, which is 3 times that of normal years.
Note that this 6% inflation rate does not include the total market capitalization of the coin circle, that is, more than two trillion US dollars are deposited outside the real economy. Obviously, without the existence of the reservoir of the currency circle, the inflation rate in the United States may be higher.
Inflation is now a thunderstorm in the U.S. economy. One way to mitigate inflation is to tighten the liquidity of the dollar, that is, to shrink the balance sheet and raise interest rates, but the consequences of doing so are likely to lead to a stock market crash, which is the last thing Wall Street wants to see, and the reason why the White House is a rat.
In the 2008 financial crisis, the US government used all its strength to save the market, funded for high-risk asset guarantees, lent money to financial institutions, and even directly invested in Wall Street predators, with only one purpose, Wall Street can not fall, the rescue is to save Wall Street.
However, this helpless act of treating the symptoms rather than the root cause not only did not remove the mines, but also buried more and bigger mines. A few years later, the reshuffled Wall Street had nearly 60 percent of the nation's financial assets in the top ten financial institutions, up from less than 10 percent in the 1990s.
Since last week, major Wall Street banks have successively released third-quarter earnings reports, and profits have generally soared. Not surprisingly, JPMorgan Chase's net profit this year will be close to Apple's. It can be said that since the big release of the us dollar last year, the trend of concentration of US dollar assets to financial giants has become more obvious, just like the situation before the outbreak of the last financial crisis: the US dollar continues to pour into Wall Street, the most profitable industries in the United States are concentrated on Wall Street, and the water level of US dollar assets continues to rise. Visible to the naked eye, a huge dammed lake is forming.
Once the dammed lake breaks its banks, not only Wall Street itself is difficult to protect, but it may be a disaster for the US economy. Therefore, before the dollar breaks the levee, it is necessary to find a large pool that can take over. More than a decade ago, this pool was China, but now, it has become a coin circle.
If the dollars are all piled up on Wall Street, once the US government shrinks its balance sheet and raises interest rates, the shock to the US stock market will be a bit killing, and if the currency circle can share some liquidity, the us stock market shock will definitely be smaller. Therefore, the US Securities Exchange released a bitcoin ETF, not to save the coin circle, but to use the pool of the coin circle to resolve the risk of the US stock market.
After Song Jiang accepted Zhao'an, he thought that he and his brothers had entered the system, but Song Huizong did not see it that way.