What are Bitcoin Concept Stocks? How will Bitcoin move in 2020? Why the big ups and downs, and what will happen in 2020 when Bitcoin's production is cut? This article will cover the above aspects.
1, Bitcoin 2020 Price Trend
Bitcoin began 2020 by continuing last year's upward trend, breaking through the $10,000 price and hitting its highest point of the year on February 12. The impact of the new coronavirus brewing and breaking out in the world at the end of February began to emerge, with more countries than China beginning to be ravaged by the coronavirus and countries' Financial markets continued to be hit.
On 24 February, stock markets across the Asia Pacific region fell sharply, with South Korea's composite index breaking the biggest fall in 16 months, the three major US indices closing down by more than 3%, and European stock markets also fell sharply, with Italy, where the outbreak was most serious, falling by the greatest amount of 5%, and Germany and France's stock markets also falling by more than 4%. The price did not succeed in sustaining itself and made a volatile pullback to around 8,500, before rebounding back to around 9,500 and holding unanimously until March 7th.
In the immediate aftermath came March 8, opec and Russia on oil production cut negotiations broke down, Saudi Arabia took the lead on the price of crude oil to cut prices, opening up a huge blow to the world's financial markets crude oil price war, so by its impact March 8 and 9 bitcoin prices fell for two days in a row, down more than 15%.
If the previous two days were just a rainstorm before the storm, the next few days saw national stock markets and bitcoin prices suffer a historic blow, with crude oil prices falling off a cliff on the 10th, US stocks thus melting twice in a week, and bitcoin prices falling wildly, breaking the long-standing 200-week strong support line on the 12th and falling to $3,800 on the 13th, with the market All holders in the market went into a panic selling frenzy, and all Bitcoin exchanges faced a lack of liquidity due to significant trading in the short term, and the Bitcoin price faced the risk of the price going straight to zero, so on the same day the BitMEX platform carried out a self "meltdown" and suspended Bitcoin trading to avoid the risk of a blowout. The market recovered from this frenzied sell-off for a period of time afterwards, and closed the day at a stable price of around $5,000.
The introduction of unlimited quantitative easing by the Federal Reserve on 23 March caused US stocks to melt up again that day, and Bitcoin rose by 10% that day as a result. However, the fall in the price of bitcoin caused a significant compression in miners' earnings from mining. In order to stimulate miners, the difficulty of bitcoin mining was lowered by 15.59% on March 26th, after which a large number of miners returned, so the difficulty of bitcoin mining was raised twice more in April. The competition between miners became more intense and brutal, and the price has been rising in small increments as a result.
Bitcoin was designed from the outset to be a fixed amount of bitcoin, so every time a certain amount of bitcoin is mined the reward miners receive for mining is halved, and this has been done twice in history, the first time in November 201228 when the reward was reduced from 50btc to 25btc, and a year later the price rose to its highest point since the halving. The second halving was on 10 July 2016, when the reward was halved again to 12.5, and the price hit an all-time high of 19891 around a year and a half later. And according to model estimates, the next halving of rewards is about to happen around May 13, so in the long run, it looks like bitcoin will reach a new all-time high caused by this halving in a year's time, and a large number of miners will be eliminated.
2, Are bitcoin concept stocks worth investing in?
Bitcoin concept stocks are actually a term used to select stocks, meaning the stocks of companies related to the concept of bitcoin, so in fact there is no particular concern about the company's performance and actual production management, etc. The type of stock will often be because of a new hot spot in the market and make the whole sector together into a kind of boom.
The author believes that investment then concept shares should be carefully selected, first, do not blindly seek to believe in the firmness of the concept of bitcoin, choose the most important aspect of the stock, from a long-term perspective or the value of the enterprise itself, so investors in the careful analysis of the company's financial situation, business situation and so on, can be invested.
Secondly, within a month Bitcoin will be facing a production cut, which will result in a large number of Bitcoin miners and mining farms being eliminated due to fierce competition, so it is even more important for investors to choose companies with superior technology and strength to invest in.
Thirdly, concept stocks are more likely to create bubbles than ordinary stocks and fall into a blind buying situation. Once a market hotspot appears, investors must restrain themselves from impulsive investments and invest carefully.
3,Bitcoin Concept Stocks vs CFDs
Both Bitcoin concept stocks and CFDs are direct or indirect investments in Bitcoin related industries, but there are certain differences between the two, first of all, CFDs have the feature of amplifying returns with a small amount of margin, which can be tens or hundreds of times the amount available for investment, and therefore can also amplify profits and income. However, it is important to note that losses are also magnified proportionately because of leverage.
Secondly, there are strict restrictions on short selling in the stock market, not every stock can be short, most stocks can only be long, and the contract for difference can meet the needs of investors for two-way operation, providing investors with greater profit space under different market conditions. Investors can buy the currency when they predict that the currency will rise and make profits. On the other hand, when an investor predicts that a currency will fall in the future, he or she can make a profit by selling at the spot and then picking the right time to buy forward, which is commonly known as shorting.
Finally, the bitcoin concept is an indirect investment in bitcoin, so in fact investors are subject to two potential risks, the first is from the business risk, the second is from the risk of bitcoin, the possibility of being affected by fluctuations will be greater, and the relevant knowledge required of investors will also be higher.
Bitcoin has experienced a roller coaster ride of ups and downs since the start of 2020, and is about to face its third production cut. Under the premise that the epidemic is now raging and the global economy is stagnant, the stimulus that the production cut will bring is not as expected who can't be sure, but we can see that the bitcoin price is gradually recovering from the early blow, and the direction of development is more optimistic in the long run.
