The most shocking news is here! Bitcoin drops a depth bomb on the RMB, with a target price of 1 million? The central bank issued a warning to short sellers. These days, the international financial market is pricing in Trump's big victory, not only winning the presidency, but also taking the Senate and the House of Representatives. Yesterday, the market showed a pattern of everything falling when Bitcoin rose. The blood-sucking effect of Bitcoin on the global capital market has spread to the US stock market. Large international institutions are selling everything to buy Bitcoin. This expresses their strong optimism about the Trump administration in the next four years. There is no risk aversion in the financial market now. The market trend is completely based on Trump's speech. Everything has returned to the situation before 2018. Here are my views.
1. The surge in Bitcoin is really a strange phenomenon. The surge in Bitcoin has really puzzled many people. Gold and bonds, which are supposed to be safe-haven assets, are falling, but high-risk assets such as Bitcoin are soaring. The reasons behind this are, on the one hand, the market's optimism about the Trump administration, and on the other hand, a large number of institutional investors have poured in, pushing up the price of Bitcoin. But this surge also makes people worry that the bubble will burst sooner or later, and many people will suffer when that happens.
2. The depreciation of the RMB is complicated. The RMB has depreciated a lot recently, from the highest point of 6.9651 to the lowest point of 7.25, a drop of more than 3,000 basis points, which really worries many people. However, the reason for the depreciation of the RMB is not single. It is affected by the 10 trillion economic stimulus plan of the Ministry of Finance and the fact that the Federal Reserve’s interest rate cut is less than expected. More importantly, the depreciation of the RMB is not active, but caused by the fluctuations in the international financial market. China has sufficient foreign exchange reserves and economic strength to withstand such short-term fluctuations, so there is no need to panic.
3. The central bank’s warning is of great significance. Facing the pressure of RMB depreciation, the central bank issued a warning in a timely manner, which is a strong response to the market. The central bank’s warning is not only a deterrent to short sellers, but also a signal of stability to the market. The central bank has sufficient means and tools to maintain the stability of the RMB, including foreign exchange intervention, interest rate adjustments, etc. Therefore, even if the RMB faces depreciation pressure in the short term, in the long run, the stability of the RMB is guaranteed.
4. Will Bitcoin really reach 1 million in the future? Some people predict that the target price of Bitcoin will be 1 million, which sounds like a fantasy. But if you think about it carefully, if the global economic situation continues to be turbulent and investors lose confidence in traditional assets, Bitcoin, as a decentralized asset, may indeed become a new safe-haven option. However, this requires many prerequisites, such as changes in the regulatory environment and technological advances. Therefore, although the target price of 1 million is bold, it may not be impossible to achieve.
5. There needs to be a balance between virtual assets and the real economy. The surge in virtual assets such as Bitcoin has indeed had a certain blood-sucking effect on the real economy. A large amount of funds have flowed into the virtual asset market, leading to tight liquidity in other markets. This is not conducive to the development of the real economy. Therefore, governments and regulators need to find a balance between encouraging innovation and preventing the virtual asset market from over-expanding and affecting the healthy development of the real economy.
In general, the surge in Bitcoin and the depreciation of the RMB are important phenomena in the recent international financial market. The reasons behind this are complex and diverse, including both political and economic factors. However, no matter how the market fluctuates, China has sufficient strength and means to deal with it. I hope that investors can look at market changes rationally, not blindly follow the trend, and do a good job of risk management. At the same time, I also hope that the government and regulatory agencies can take effective measures to maintain the stability and healthy development of the market.
