Bitcoin’s surge and plunge Taiwan’s central bank points out two major concerns

The price of bitcoin has gone up and down, from once rising above $58,000 last week to falling below $45,000, for the trend of bitcoin, the Central Bank of Taiwan warned on the 2nd, from the market structure of bitcoin, its supply is fixed, and has a “high concentration of holders”, “the price is susceptible to artificial speculation” and other doubts. The market structure of bitcoin is fixed and has a “high concentration of holders” and “the price is susceptible to artificial speculation” and other doubts.

The central bank said the price of bitcoin has become significantly more volatile in the past few months. In particular, some international institutions have invested in the bitcoin market, and tesla CEO Musk has touted it, causing it to climb from $29,000 in early January to a record high of more than $58,000 at one point.

However, they say, recently Musk said its price seemed too high, and Bitcoin then pulled back to $45,000, a heavy 22% drop, “showing the nature of Bitcoin’s price spikes and drops.”

For bitcoin surge and plunge may, the central bank recently released a report had further mentioned three analysis, pointed out that 85.51% of the bitcoin by 0.45% of the wallet hold, ownership is highly concentrated, vulnerable to artificial speculation; bitcoin of the supply can not be adjusted according to market demand, and production from May 2020 by half, so that the market supply and demand more imbalance; virtual currency market compared to the traditional financial market is still shallow dish The virtual currency market is still a shallow market compared to the traditional financial market, and the price is susceptible to the influence of large investors.

In addition, the recent Bank of England president Andrew Bailey pointed out that the current virtual currency has not been tested for a long Time; another BIS general manager Augustin Carstens also warned that the bitcoin system may collapse in the future; U.S. Treasury Secretary Yellen also said recently that bitcoin is usually used for illegal financial activities, and extremely inefficient, consume a lot of energy, do not think bitcoin can be widely traded. It is not believed that bitcoin can be widely used for trading.

The central bank of Taiwan stressed that bitcoin is not issued by a specific institution, and there is no physical asset to guarantee its value, it is a high-risk virtual commodity, and called on people to be cautious if they want to hold it.