Abstract : It was not necessary to increase leverage easily, otherwise it would further amplify investment risks.
William, the chief researcher of OKEx Research Institute, believed that the recent rapid rise of bitcoin price did involve speculation and hype, but the direct reason was that high-net-worth investors and institutional investors had begun to enter the cryptocurrency market.
William analyzed that financial institutions bought a large amount of Bitcoin, and the underlying reason for it was the changes in the global macroeconomic situation this year.
On the one hand, due to the impact of COVID-19, the global economic recovery will slow down in 2020; on the other hand, when it comes to the U.S. central bank, some central banks have introduced extremely loose monetary policies, pushing up inflation expectations in the financial market.
In an economic environment of high inflation and low growth, in order to avoid the loss of nominal principal and the need to pursue higher returns, investors' demand for hoarding cash has naturally evolved into demand for gold and Bitcoin.
Besides, he noticed that the current Bitcoin bull was initially lead by institutions, but now there was a trend towards turning to small and medium-sized investors.The excitement of the market was further amplified, pushing the price of Bitcoin to rise rapidly.
William reminded young and ordinary investors that they needed to remain rational and correctly in mind, recognizing that Bitcoin was an asset with high risk and its price fluctuated greatly. Therefore, it was not necessary to increase leverage easily, otherwise it would further amplify investment risks.