Bitcoin market value reaches 1 trillion U.S. dollars

Bitcoin market value reaches 1 trillion U.S. dollars, chip maker Nvidia announces that it will produce mining machines.

 Inflation worries, institutional support, big-name stances...Multiple factors have made cryptocurrencies more and more popular.

Today, Bitcoin price is sent to US$53,000 on multiple exchanges, bringing the market value of the entire Bitcoin market to nearly US$1 trillion.

At the same time, news of the "mining" market has continued, and well-known companies and market players have rolled up their sleeves and announced their end. On February 18th, GPU manufacturer Nvidia announced that it has launched a processor CMP dedicated to mining ether, which is expected to meet the expected ROI (return on investment) of "miners". On February 19, Macau casino tycoon Zhou Zhuohua also entered the market publicly, and Sun International, a Hong Kong-listed company, is planning to purchase 1,000 cryptocurrency mining machines.

Bitcoin market value is close to $1 trillion

As of 7:30 pm on February 19th, Beijing time, according to the statistics of Bloomberg Terminal, the market cap of Bitcoin has reached 980 billion U.S. dollars. This news further stimulated the market volume, and the frenzied trading pushed up the price of Bitcoin. On Bitflyer, Bitstamp, ItBit, B2C2, Coinbase, Bitfinex, Kraken, EXMO and other exchanges, the price of Bitcoin is heading toward $53,000.

This skyrocketing market value means that Bitcoin, a financial product that was originally regarded as an "alternative investment", is better than most listed companies due to the innumerable number of corporate financial officers, fund helms, and risk-preferred investors. Both are more "attractive." According to statistics, there are only five listed companies with a market value of more than US$1 trillion, including Apple, Saudi Aramco, Microsoft, Amazon, and Google. The market value of Bitcoin is larger than that of Tencent and Facebook. The market value of the two is now 7.11 trillion Hong Kong dollars and 767.1 billion US dollars.

Entering 2021, the cryptocurrency market has climaxed one after another. Only from the perspective of the rate of return, traditional assets have been far behind. As of 7:30 pm on February 19th, Beijing time, according to China Southern Finance's all-media statistics, Bitcoin has risen from US$29,000 to US$53,000 during the year, Litecoin has risen from US$130 to about US$230, and Ethereum has risen from US$750. To around US$1,900, the increase was 83%, 78%, and 156% respectively. In addition, Dogecoin, Ripple (XRP), Stellar (Stellar), etc., whose prices are at the cent level, have amazing volatility and strong speculation.

In contrast, the global stock market, bonds, and precious metals cannot match the returns of cryptocurrencies. The Nasdaq Index, which skyrocketed 44% last year, rose 7.6% during the year; since the impact of last August at US$2,000 per ounce, gold’s upward momentum has been weak, and recently fell below US$1,800 to around US$1770.

Nvidia puts off production of mining machines

On the other hand, the "mining" market is also constantly news. As "miners" are buying out the market and causing market prices to drive up, leading GPU manufacturer Nvidia has to announce that it will manufacture GPUs exclusively for "mining" before the new GPU hits the market. The company said: "Let the GPU belong to the game, and let the new product belong to the miners."

Although the CPU was originally the main engine of the "mining machine", as the mining difficulty increased, the GPU was also rewritten to assist the "miners" in their hard work. In the recent GPU market, Nvidia’s old GPU, that is, the current RTX 30 series, is in short supply, and the price is rising, which has caused trouble for Nvidia’s original loyal users. Nvidia GPU is sought after by some gamers and is a hot hardware device in the game market.

Since 2021, Ether has risen by 150%, which also attracts "miners" to "mining" in the polar regions. In early February, a Vietnamese Internet cafe called Star Gaming posted on social media that it had used RTX 3080 NVIDIA GPUs for "mining." In the photo, dozens of RTX 3080s are connected in series, reflecting that the hardware investment of a mining machine is expensive. However, the Internet cafe still claims that the income of “mining” is higher than that of opening an Internet cafe.

Nvidia has been asked by investors for a long time whether it intends to produce mining machines. In mid-January of this year, the company’s CFO Colette Kress was asked this question again by investors, and she replied at the time that “the amount of business brought about by mining is very small”. However, on February 25, NVIDIA will soon launch a new generation of GPU, RTX 3060, the current "mining" market frenzy is expected to seriously interfere with the original market supply and demand, and will cause strong dissatisfaction among old users and game users. At this juncture, Nvidia had to take measures.

Matt Wuebbling, the global leader in charge of the company's gaming brand GeForce, announced that Nvidia has taken two steps to deal with the invasion of "miners". First, the software program of RTX 3060 was rewritten, which cut the "hash rate" by 50%, in other words, cut the efficiency of "mining" by 50%. Second, in order to prevent "miners" from continuing to fight for the new GPU, a CMP (cryptocurrency mining processor) dedicated to "mining" will be introduced.

Nvidia's GPU is mainly used for mining "Ethereum", and CMP is also designed for Ethereum. Ether is the second most enthusiastic cryptocurrency after Bitcoin. At present, one Ether is worth about $1920, and its recent appreciation rate even exceeds that of Bitcoin. In fact, the ROI (return on investment) of "mining" is the decisive factor for whether "miners" adopt Nvidia GPUs. After considering the hash rate of GPU, electricity cost, and hardware input cost, if the price of Ether is sufficient High, it will form a considerable ROI, which will cause "miners" to buy GPU or customized "mining machine" equipment without hesitation.

On February 19, Sun International, a subsidiary of Macau’s well-known casino businessman Zhou Zhuohua, announced on the Hong Kong Stock Exchange that it had entered the "mining machine" market. The company said it will acquire 1,000 cryptocurrency mining machines from an unnamed seller. The announcement disclosed that the above-mentioned mining machines are mainly distributed in Inner Mongolia, Xinjiang and Sichuan provinces. However, the announcement did not disclose the preliminary transaction price, nor did it specifically introduce the types of cryptocurrencies. In addition, the disclosure this time is only a memorandum of understanding, which means that the buyer and the seller need to negotiate further and cannot guarantee the completion of the final transaction.

Controversy over the value of cryptocurrency investment

On February 18, the world's first Bitcoin ETF was officially launched on the Toronto Stock Exchange. The full name of this ETF is Purpose Bitcoin ETF, code BTCC, issued by Purpose Investment, a Canadian asset management company. BTCC performed well on its first day of listing, with a trading volume of US$165 million.

In fact, there have been several cryptocurrency tracking products in Europe before, and their functions are similar to ETFs, but Purpose Investments stated in a statement that BTCC can directly invest in physical or digital bitcoins and is the first real bitcoin ETF. .

Regarding the investment value of cryptocurrency, the market is still arguing. Known as the "new debt king", Gundlach, CEO of Double Line Capital, said on social media on February 18: "I am a long-term bearer of the U.S. dollar and bullish on gold, but in the past six months Inside, my views on both of the above are neutral. A lot of money is pouring into narrow investment channels, and Bitcoin is an asset under the stimulus package.” Although Gundlach did not claim that Bitcoin has any value, But he at least acknowledged the rational factors behind this asset boom.

Bill Gates also publicized his views on Bitcoin. He stated that he neither invested in Bitcoin nor did he want to make predictions about Bitcoin's price movements. He believes that the rise and fall of Bitcoin "may be based on fanaticism or opinions from all walks of life."

There are still many people who openly bombard Bitcoin, and regulators are one of them. The newly appointed US Treasury Secretary Yellen once again reminded investors on February 18 that Bitcoin is a “highly speculative asset”.