The concept of bitcoin was first proposed by Nakamoto on November 1, 2008, and was officially born on January 3, 2009. According to the idea of Nakamoto, the open source software is designed and released, and the P2P network on it is constructed. Bitcoin is a virtual encrypted digital currency in the form of P2P. Point to point transmission means a decentralized payment system. Unlike all currencies, bitcoin does not rely on a specific currency institution to issue. It is generated by a large number of calculations based on a specific algorithm. Bitcoin economy uses a distributed database composed of many nodes in the whole P2P network to confirm and record all transactions, and uses cryptography design to ensure the security of all aspects of money circulation. The decentralized nature and algorithm of P2P can ensure that it is impossible to artificially manipulate the value of bitcoin through mass production. The design based on cryptography can make bitcoin only be transferred or paid by the real owner. This also ensures the anonymity of money ownership and circulation transactions. The biggest difference between bitcoin and other virtual currencies is that the total amount of bitcoin is very limited and it has a strong scarcity.

Since 2021, Tesla has announced a total investment of US $1.5 billion in bitcoin, and Meitu has announced a total investment of US $40 million in bitcoin and ether. With the continuous influx of bitcoin investors, bitcoin reached an all-time high of $61800 on March 14. According to foreign media reports, Charlie bilello, CEO and founder of compound capital advisors, summed up the performance of top asset classes by using ycharts' data. He noted that in the past decade, bitcoin's average annual return rate was 230%, which was more than 10 times higher than the second ranked US Nasdaq 100 index (20%). With the continuous craze of bitcoin market, many people wonder whether the bitcoin bubble continues to expand or break down.

At present, the rapid rise of bitcoin price can be summarized as follows:

1) Due to the epidemic situation and the downturn of real economy, the excess money of countries led by the United States has not flowed into the real economy, but stayed in the financial system, that is, it flowed into the deposit reserve and the secondary market, which is the commonality brought about by monetary easing. In addition, part of the stock market to accommodate liquidity is further spilled to other industries, thus driving the rapid growth of cryptocurrency, especially bitcoin. The 1.9 trillion economic stimulus plan recently passed by the US House of Representatives is one of the main reasons why bitcoin has been pushed to the highest level in history. In addition, due to the weakening trend of the US dollar brought by inflation, there is an urgent need for a substitute in today's market. Bitcoin itself is an asset calculated in US dollars, which is consistent with many commodities such as crude oil and gold. The weakening of the US dollar will certainly drive the trend of such assets.

2) Bitcoin is endowed with the coat of the latest technology, which is in line with the modern people's pursuit of the wave of innovation. It has made money speculation a fashion and led many young people to join in cryptocurrency, including the recent mining fever and money speculation fever.

3) The scarcity of bitcoin is also the reason for its continuous growth. According to the upper limit of bitcoin's output speed and total scale reduced every four years, it is estimated that no new bitcoin will be produced by 2140, and the final circulation of bitcoin will be about 21 million. Its scarcity will also make it popular.

4) The platforms of some institutions and technology giants have greatly increased people's confidence in bitcoin, including Tesla CEO musk, Softbank capital sun Zhengyi, MicroStrategy, etc. Up to now, MicroStrategy continues to purchase bitcoin strategically. Since March, MicroStrategy has spent $15 million and $10 million twice. So far, it has held 91326 bitcoins. The total cost of these coins is $2.211 billion, which is equivalent to the average holding price of $24214 / coin. Now the unit price of bitcoin is about $57000, and the profit rate reaches 135% The total profit is close to $3 billion. It is precisely because of the recent continuous purchase of MicroStrategy that the performance of bitcoin has swept away the "haze of continued decline" of "312", giving the "hoarding" army great confidence.

5) Although bitcoin's digital currency nature will have a lot of regulatory risks, its cross-border payment and settlement and other attributes can replace the use of U.S. dollars to a certain extent. Although bitcoin and other cryptocurrencies are hot in the market, there are many risks. Compared with gold and other hedging assets, bitcoin does not have the characteristics of low volatility and high liquidity. Its main holders are retail investors, and its price trend is easily affected by the short-term trading behavior of retail investors.

Secondly, after the announcement of the National Bureau of cryptocurrency in 2017, it is easy to be affected by the fluctuation of the price of bitcoin and tax evasion. At the same time, the frequent cases of digital currency fraud in recent years have undoubtedly made the regulatory authorities pay more attention to the gray areas of this emerging asset in China. In the short and medium term, bitcoin price volatility may increase with the acceleration of global economic recovery supported by vaccines and the rising expectation of mainstream central bank policy exit.

In addition, bitcoin exchange incidents occur frequently. Recently, coin an was investigated by the U.S. Commodity Futures Trading Commission. People familiar with the matter disclosed that the U.S. Commodity Futures Trading Commission (CFTC) is conducting a confidential investigation on coin an, the largest cryptocurrency exchange in the United States, because coin an allows Americans to trade illegal derivatives. Previously, there was also news that senior executives of Huo coin were assisted in the investigation. Once problems occurred in the cryptocurrency exchange, countless digital currency holders would fall into the crisis of being unable to trade and cash out. Under the panic transmitted by the trading platform, some people have begun to learn to transfer the assets placed in the exchange into personal controllable wallets to avoid the risks brought by the platform itself.

(2021-4-9)