#BTC上攻11万？
Have you ever wondered what mysterious forces are behind the soaring price of Bitcoin (BTC)? Today, let me reveal those financial “hidden doors” that ordinary people find hard to notice.
Let's start with the comeback story of Luo Yonghao. After accumulating a debt of 600 million, Old Luo reluctantly turned to live streaming sales in an attempt to find a way to pay off his debts. However, Feng Tang sharply pointed out that at the conventional sales pace, it would take selling at least 6 billion worth of goods to pay off this astronomical number, which is tantamount to a pipe dream, and it might be impossible for Old Luo to achieve even in his old age. So, Feng Tang pointed out a “shortcut” for Old Luo — utilizing the capital market. Following this advice, Old Luo founded two companies: “Starry Sky Ambition” and “Make Friends.” Miraculously, as his live streaming business flourished, the equity value of these two companies skyrocketed like a rocket. In the first year, someone came with 300 million, attempting to acquire shares in Old Luo's company, but fortunately, Feng Tang advised against it, preventing Old Luo from selling off most of his empire in a moment of impulse. Finally, by the end of the second year, a financially strong company spent 589 million to acquire 40% equity in “Starry Sky Ambition,” allowing Old Luo to successfully come back and pay off all his debts. Upon reflection, Old Luo did not simply rely on the value created from live streaming sales to turn his fortunes around, but cleverly leveraged the appreciation of equity to achieve his comeback. Is there some kind of “little secret” hidden in the capital market?
Next, let’s focus on the magical world of cryptocurrencies. Did you know? The mechanisms that define market fluctuations today have a “BUG” that is easily overlooked yet critically important. Once you understand this mystery and know how to cleverly apply it, you will have taken the crucial first step towards financial freedom through financial speculation. This is not limited to the cryptocurrency market; it also applies to various markets like commodities futures, forex, real estate, stocks, and more.
To make it easy for beginners to get started, let's talk about the most basic knowledge. The price movements you see daily in cryptocurrencies are actually lines formed by the latest transaction prices every minute, and they have nothing to do with trading volume. This is true not just in the crypto market, but also in commodities futures, forex, real estate, and other markets. In every transaction, the number of buy orders and sell orders is always equal because there can be no sale without a purchase; each transaction corresponds to one buyer and one seller.
So, how does the price of cryptocurrencies rise? The principle is actually very simple; it boils down to supply not meeting demand. Some might wonder: Isn’t it said that buy orders and sell orders are always equal? How can there be a situation of supply not meeting demand? To put it simply, let's assume there is a cryptocurrency priced at 10 yuan, and there are 10 people willing to buy it at that price, but only 9 people are willing to sell at that price. This means that after completing 10 transactions, there is still 1 person who desperately wants to buy but leaves empty-handed. If this person is determined to get the coin, they will have to seek a seller at a higher price, such as 10.1 yuan. Once they successfully find a seller at 10.1 yuan and complete the transaction, the latest transaction price now becomes 10.1 yuan, and we see the price of the coin rise from 10 yuan to 10.1 yuan. If the sell orders at 10.1 yuan still do not meet demand, this person will have to continue seeking sellers at even higher prices, like 10.2 yuan, and accordingly, the latest price we observe will be updated to 10.2 yuan.
Of course, real-world transactions are not divided by the number of people in buy and sell orders but by the size of the funds. For example, if a big player holds 100 million in funds and wants to buy a cryptocurrency, but the available sell orders at the current price only total 50 million, then the remaining 50 million will have to seek transaction opportunities at higher prices. Similarly, the principle of price decline in cryptocurrencies is the same; you just need to swap the roles of buy orders and sell orders.
Having understood the basic logic behind stock price fluctuations, the key question arises: What exactly is that mysterious “BUG”? How can we utilize this underlying logic to create profits for ourselves?
The price of cryptocurrencies we observe is the latest transaction price, which is the marginal price. This means that regardless of how many transactions occurred before, the latest transaction price is what determines the cryptocurrency price and is completely unrelated to trading volume. Imagine this fantastical scenario: there is a cryptocurrency priced at 10 yuan, and in the last minute, only 1 transaction occurred at a price of 1000 yuan. In an instant, we would witness the price of this cryptocurrency soar from 10 yuan to 1000 yuan, and its market value would explode 100 times. (This situation is not uncommon for some niche “dog” coins!)
However, in reality, there are naturally no such “fools” willing to pay 100 times the price for something. Even if such a wealthy person exists, according to the exchange's order matching mechanism, they would prioritize completing transactions at the lowest available sell order price. This means that even if they are willing to buy the coin at 1000 yuan, as long as there is a sell order at 10.1 yuan, they will prioritize completing the transaction at 10.1 yuan.
However, the market occasionally experiences special conditions that cause the price of cryptocurrencies to skyrocket. Imagine a scenario where a powerful player has acquired all circulating coins of a particular cryptocurrency. If the current price of this coin is 10U, and the total circulating supply is 1 million, then the total market value is 10 million U. Now, let’s challenge you: if this player attempts to push the price of this coin to 1000U, inflating the market value to 10 billion U, what would be their cost?
The answer is jaw-dropping: 0 yuan! Isn’t it hard to believe? The principle is quite simple: since all circulating supply is firmly controlled by the player, if they remain inactive, there will be no sell orders in the market. At this point, they just need to place a sell order at 1000U, and then take out 1000U from their own pocket to facilitate this transaction. In reality, this 1000U goes back into their own pocket, yet we see the price of the cryptocurrency soar from 10U to 1000U, and the market value multiplies by 100. In this way, they can effortlessly increase their total assets exponentially.
Through this extreme example, everyone should understand a principle: when a certain coin is heavily held by an institution (it doesn't have to be 100%, as long as most of the circulating market value is 'frozen' and the actual circulating market value is very small), the cost to push the price of the coin to a high level will be very low. Moreover, the higher the price goes, the lower the cost of further pushing it up, making the upward momentum even easier.
However, even if the market value rises to great heights, whether the price reaches 10,000 or 1 billion, it is merely paper profit. If the player wants to realize actual profits, they must sell off all the coins they hold to cash out, and this capital game only concludes then.
This is the 'BUG' of the capital market pricing mechanism, defining the latest market price based on the latest transaction price. It seems logical at first glance, but in reality, it opens the door for large funds to manipulate prices, allowing them to easily raise the price of an asset far beyond its true value. The so-called 'strong player coins' are like this, where the chips are tightly held in the hands of the speculators, and they can easily manipulate the market, needing to pay very little to influence the market due to low selling pressure and large holdings, naturally holding the right to set prices.
Now, major institutions are frantically competing for BTC chips, and the situation is becoming increasingly intense. Currently, the BTC spot ETF holds 108.24 billion BTC, accounting for 5.72% of Bitcoin's market value. It is foreseeable that as this proportion continues to rise, institutions will gain absolute authority in the BTC market!
In the cryptocurrency market, it is both a battleground for intense human nature and a trial ground for the collision of faith and strategy. Every price fluctuation is a brutal selection and reshaping, ruthlessly eliminating blind followers, with only the true strong who truly understand market rules able to survive.
Having read this far, don’t forget to like this post, and hurry to share it with your fellow crypto enthusiasts, let’s explore the mysteries of the crypto world together!
