Marking the arrival of a second spring for cryptocurrencies?

In just over a decade since the inception of cryptocurrencies,Ranking of Global Forex Dealers 100 they have experienced a cycle of rise, frenzy, and falling out of favor. It was thought that cryptocurrencies would remain in a slump, yet recently, they welcomed another surge. Bitcoin, which had long been hovering around $50,000, began to skyrocket on February 26, breaking through $60,000 by the 28th and reaching a recent peak of $63,000 on the 29th. Although there have been fluctuations since then, it has generally stayed around $61,000, marking an increase of over 20% from before.

When Bitcoin first emerged, it was not recognized by the mainstream market and lingered at a low price, around a few hundred dollars. It then experienced its first peak in 2017, reaching nearly $20,000, but cryptocurrencies, led by Bitcoin, were widely questioned and even ostracized, leading to a nearly two-year slump and falling below $10,000.

The downturn continued until the end of 2020 when many countries, regions, and institutions began to recognize cryptocurrencies, ushering in a true peak and skyrocketing to $60,000 at the beginning of 2021.

However, this peak did not last long. By the end of 2021, Bitcoin faced a crisis again, plummeting to $16,000, and although there was a slight rebound, it was hard to return to its previous peak.

During this period, domestic investors were mostly pessimistic about cryptocurrencies led by Bitcoin, leading many investors to sell off or short cryptocurrencies, with some even using leverage to short.

Regrettably, in the second half of 2023, Bitcoin once again reached a peak, stumbling and finally breaking through the $60,000 mark recently, nearing its historical peak.

Especially the surge in February 2024, from $40,000 to $60,000, with a gain of over 40%. Although there was a slight fall after reaching the peak, it still was the highest peak since November 2021.

This unusual price fluctuation is undoubtedly driven by reasons, and through searching related information, we can know the direct reason for Bitcoin's resurgence: the world's largest Bitcoin buyer and holder, the well-known coin speculating company MicroStrategy, re-entering the market.

Originally a mundane software company, MicroStrategy has essentially become a public figure and a flagbearer through a series of discussions about, promotion of, and even speculation in cryptocurrencies.

Michael Saylor, the founder of MicroStrategy, expressed strong confidence in cryptocurrencies in December last year, asserting that Bitcoin would definitely progress forward in 2024 and that Bitcoin was quite safe. This nearly direct endorsement further solidified his and MicroStrategy's position in the cryptocurrency circle.

Between February 15th and 25th, MicroStrategy acquired another 3,000 Bitcoins for $155 million, directly contributing to the rapid and significant rise in Bitcoin's price. Such a high-profile investment undoubtedly boosts market confidence.

However, this surge was not smooth. On February 28th, due to a glitch in the cryptocurrency exchange Coinbase's application, many users' account balances dropped to zero, causing Bitcoin's price to fall back to around $61,000. This reminded many investors that cryptocurrencies are a fragile financial product, not blindly to be dived into, as blind participation can lead to significant losses at any time.

Up to today, Bitcoin is still rising, although the pace has slowed, but many investors and holders still have considerable confidence in Bitcoin.

Amidst the continuing rise in the Bitcoin market, there exists a group of victims: investors who shorted Bitcoin. Due to their own judgment, listening to other investors, and institutions' recommendations, among other reasons, they chose to short Bitcoin, even using large leverage to do so, leading them to be completely trapped in the recent Bitcoin rise. With the continued rise, the eventual leverage collapse forced them into a catastrophic liquidation, losing all their investment.

They issued a warning to every investor with their finances: every investment inevitably comes with risks, and using leverage exponentially increases these risks. It is crucial to invest with caution!

The market carries risks, and investment should be cautious. This article does not constitute personal investment advice and has not taken into account individual users' specific investment goals, financial situations, or needs. Users should consider whether any opinions, viewpoints, or conclusions in this article are suitable for their particular circumstances. Investing based on this is at one's own responsibility.