After an interval of two monthsHuckseedBitcoin stands on 7 again.HuckseedThe $10,000 mark. On the morning of May 21, Beijing time, the price of Bitcoin rose all the way, breaking the $70, 000 mark for the first time in more than a month, reaching as high as $71650 and rising as much as 8.2% in 24 hours. As of 16:30 on May 21, the price of Bitcoin had risen to $70959, up more than 6 per cent on the day.

Analysts believe that the surge in bitcoin prices is related to multiple factors such as the approval of spot ethernet ETF, the inflow of funds into the digital asset market, and the rise in gold prices. But at the same time, the currency price trend can not get rid of the "cyclical" financial law after all, and will be affected by geopolitical disturbance, Fed monetary policy and interest rate cut expectations.

Virtual coins have soared across the board.

In addition to bitcoin, ethernet rose nearly 20% on may 21st, with prices above $3700. Other virtual coins have also soared almost across the board, including coin an coin, dog coin, STETH coin, and other prices have all increased by 6% to 20%. As of 16:00, the price of ethernet was quoted at US $3659, the largest increase in the major virtual currency.

The move comes after Bitcoin hit an all-time high of $73000 in mid-March, when it was driven by the inflow of money into the spot ETF market and the upcoming "halving" event in April. Since then, Bitcoin has experienced a roller coaster ride, falling $60,000 at one point in early May as US inflation changed and Fed expectations for interest rate cuts weakened.

With the influence of multiple macro factors, this situation has now changed. In the view of many analysts, the surge in Bitcoin is affected by the rise in the price of Ethernet Square. On the news side, some analysts speculated that the Securities and Exchange Commission is likely to approve spot ethernet ETFs this week. Bloomberg ETF analysts raised their chances of approval to 75% from 25%, significantly boosting market confidence.

"from the example passed by the bitcoin spot ETF, it can be seen that the approval of the ethernet ETF will provide investors with a more direct and compliant investment channel, and if the ethernet ETF is also approved, it is likely to attract more capital into the digital asset market." Yu Jianning, co-chairman of the Block chain Special Committee of the China Communications Industry Association and honorary chairman of the Hong Kong Block chain Association.

On the other hand, the supply dynamics of the digital asset market also have an impact on prices. As the market supply of digital assets is relatively limited, with the increase of demand, the price of digital assets increases naturally. Mr Yu said that some large institutional investors and asset managers, such as ARK, 21Shares, Hashdex, InvescoGalaxy, BlackRock and Fidelity, were waiting for the SEC's decision on their application for spot ethernet ETFs, indicating that the market expected more institutional capital to enter, further pushing prices higher.

The relationship between digital assets and gold price can not be ignored. Inflation in the United States is slowing, expectations of interest rate cuts are rising, and the prices of precious metals such as gold and silver have been rising in recent days. Judging from the recent trend of Bitcoin, it has basically risen and fallen in the same direction as gold and silver.

Yu Jianning also pointed out that as global economic uncertainty increases, investors seek safe-haven assets, while digital assets, especially Bitcoin, are regarded by some investors as "digital gold" because of their decentralized nature and limited supply. Therefore, when the price of gold is stable or rising, the digital asset market may be positively affected.

Volatility risk unknown

Just like the "roller coaster" market that Bitcoin encountered in April and May after setting an all-time high, it remains to be seen whether Bitcoin will continue to "soar" after this rally. According to Pan Helin, a well-known economist, there may be a huge risk of price fluctuations for investors.

"the rise and fall of the digital asset market is essentially the basic operation law of the financial market. As a representative digital asset, Bitcoin has three elements: financial attribute, industrial attribute and technological attribute. At the same time, it has been highly financialized, so it is very likely that it can not get rid of the "cyclical" financial law, that is, "there is a rise, there is a fall, there is a rise". " Yu Jianning said.

The trend of bitcoin will also be affected by a variety of factors in the future. On the one hand, Bitcoin spot ETF is expected to follow the successful trajectory of Golden ETF. Data show that BlackRock's spot bitcoin ETF IBIT and Fidelity's spot bitcoin ETF FBTC assets under management exceeded $10 billion in 49 and 77 trading days respectively, setting a record for ETF asset management.

On the other hand, geopolitical tensions continue to destabilize global financial markets. In this context, Bitcoin, as a decentralized asset, could attract investors seeking safe haven, pushing up its price, Mr Yu said. But if geopolitical uncertainty slows the global economy, Bitcoin could also face downward pressure as investors withdraw to avoid risk.

In addition, the Fed's monetary policy also has an important impact on the price of special coins. Yu Jianning explained the relationship between interest rate cuts, regulatory environment and currency prices: if the market expects the Fed to cut interest rates, this will usually lead to a depreciation of the dollar, which in turn could increase investor interest in non-traditional assets such as bitcoin; interest rate cuts could also increase market liquidity and provide more money for the bitcoin market, which could have a positive impact on prices. As the digital asset market matures, regulators are likely to introduce more clear policies and regulations. A more stable and predictable regulatory environment may attract more institutional investors to enter the market, increasing demand for bitcoin. On the contrary, if the regulatory policy becomes too strict, it may curb the growth of the market, or even lead to a fall in prices.

In the face of the volatility of the digital asset market, investors should see the high risk behind the high volatility. Digital assets are still high-risk investment assets, and the range and speed of asset prices are significantly different from those of traditional assets. it is important to adopt appropriate risk management strategies. At the same time, diversified portfolio can reduce the risk of a single asset. We should maintain a long-term perspective and avoid making impulsive decisions due to short-term market fluctuations. " Yu Jianning said.

Beijing Business Daily reporter Yue Pingyu Dong Jiexuan