In today's digital economy era, Bitcoin has attracted much attention as a virtual currency. However, its frequent ups and downs have caused widespread concern and controversy. Exploring the issues and impacts of Bitcoin's ups and downs can not only provide insight into the ever-changing digital currency market, but also reveal the profound economic and financial connotations contained therein.

The ups and downs of Bitcoin are not only a microcosm of the digital currency market, but also a mirror of the global financial system. This extreme volatility brings both huge opportunities and numerous crises. In this article, we will deeply analyze the root causes of Bitcoin's ups and downs, analyze its impact on the economy, society and individuals, and explore how to seize opportunities and turn crises into challenges in the ever-changing market.

The price fluctuations of Bitcoin are like a roller coaster, which is jaw-dropping. Bitcoin, which was once highly expected, soared and plummeted in just a few days, making investors feel like riding a roller coaster. This extreme volatility not only challenges investors' psychological tolerance, but also affects the stability of the entire financial market. A sudden rise and fall is enough to make the market panic, and investors' high-spirited mood also fell to the bottom in an instant.

Behind the sharp rise and fall of Bitcoin, there are many complex factors hidden. The uncertainty of policies and regulations, the fluctuation of market demand, the spread of speculative sentiment and other factors are intertwined, which constitute the important reasons for the fluctuation of Bitcoin prices. And the impact of this extreme fluctuation is also far-reaching, not only limited to the financial market, but also permeated into all aspects of social life.

The problem of Bitcoin's sharp rise and fall is not isolated, and its influence has surpassed the field of digital currency. Globally, Bitcoin's price fluctuations have not only attracted the attention of investors, but also attracted the attention of regulatory authorities and academia. How to rationally view Bitcoin's price fluctuations and how to seize the opportunities in the digital currency market have become a realistic issue facing everyone.

In the face of the problem of Bitcoin's sharp rise and fall, we must keep a clear head and rationally analyze market dynamics, but also maintain confidence and seize investment opportunities. In this digital economy era, Bitcoin's sharp rise and fall is just a microcosm of the financial market. What is more important is how we deal with this extreme fluctuation, how to maintain our composure in the changing situation, and how to seize opportunities.

The surge and plunge of Bitcoin is both a crisis and an opportunity. In this era of digital currency, we need to remain rational, seize opportunities, turn crises into challenges, and achieve the growth of personal wealth. The future of Bitcoin is full of infinite possibilities. We need to meet future challenges with an open mind and jointly create a bright future for the digital economy.

The problem of Bitcoin's surge and plunge and its impact are not only a storm in the digital currency market, but also a baptism of the global financial system. In this storm, we need to strengthen our confidence, remain rational, seize opportunities, and turn crises into challenges. May we jointly create a more prosperous and stable financial world in the era of Bitcoin's surge and plunge.

The four most famous international exchanges:

Binance INTL	OKX INTL	Gate.io INTL	Huobi INTL
China Line　APP DL	China Line　APP DL	China Line　APP DL	China Line　APP DL

Note: The above exchange logo is the official website registration link, and the text is the APP download link.

Since 2013, the price of Bitcoin has risen from $13 at the beginning of the year to more than $1,000 at the end of the year, and its increase can be said to have reached more than 60 times. In fact, this is all due to the global Bitcoin craze. Chinese aunts have even turned from the gold market to the Bitcoin market, so the Chinese demand for Bitcoin has risen sharply since October 2013. However, on the other hand, the lack of policy guidance and relevant regulatory regulations for Bitcoin in China has failed to effectively curb its enthusiastic investment sentiment in Bitcoin. It is precisely because of the high profits of Bitcoin that many people take risks, so it is not surprising that Bitcoin has skyrocketed and plummeted. If you want to learn more about the surge and plummet of Bitcoin, you might as well take a look at the analysis of the problems and impacts of the surge and plummet of Bitcoin by the editor of the currency circle.

 Analysis of the problems and impacts of the surge and plummet of Bitcoin

Looking back, the last bull market of Bitcoin was in 2017. From $1,000 at the beginning of 2017, it rose 18 times in 12 months to $18,000. Earlier, Bitcoin’s price broke through $1 on February 18, 2011, and reached $100 on May 3, 2013, a 100-fold increase in just 27 months. In comparison, the 5-fold increase in 4 months is not too conspicuous in the 11-year history of Bitcoin’s surge.

Some people are definitely dissatisfied, believing that the difficulty of Bitcoin’s increase from $1 to $100 (an increase of $99) is definitely less than the increase from $50,000 to $57,000 (an increase of $7,000). This view of measuring the difficulty of rise and fall by absolute increase can only be used for valuation in the traditional monetary system.

So far, no one can clearly explain the value of Bitcoin, and there is no set of pricing basis that is recognized by everyone. In the end, the price fluctuation can only be attributed to the confidence of buyers and the public’s emotions, which is precisely the most illusory and difficult to measure. Therefore, the price of Bitcoin is like a small boat without an anchor in the sea. With the huge fluctuations up and down with strong winds and waves, it can fall to 4,000 in a year, and it can also rebound to 57,000.

There are exactly three four-year periods from 2008 to 2020, which we call the three halving years. 2012, 2016, 2020. The most recent halving was in May last year. And what we can understand is that the year after each halving will usher in a super bull market in the currency circle.

From a financial perspective, large investment institutions represented by Grayscale have entered the market one after another and started to lay out. You can say that the gossip fortune-telling analysts in the currency circle are fools without a pattern, or that the currency circle enthusiasts are brainwashed ignorant people, frogs at the bottom of the well. But you have to know that the people in the investment institutions are not fools. They are elites from the financial circle. Their data departments, market value management departments, etc. are all composed of elites.

What they recognize will definitely go up. As long as they take action, it means this huge influx of funds. What will the influx of funds bring? Of course, it is a crazy rise in prices. This year, we know that due to the entry of investment institutions such as Grayscale, the price of Bitcoin has steadily risen from 3,800 US dollars at the beginning of the year to more than 50,000 US dollars now. There is a profit margin of nearly ten times, but this is just the beginning, not the end.

 Summary of factors affecting Bitcoin

There are many factors that affect the price of Bitcoin: such as mining computing power, investment demand, etc., which play different roles in different periods, but one thing is certain, the factors that currently affect Bitcoin are public sentiment, or the panic index, and other basic factors temporarily become secondary factors.

The myth of Bitcoin's hedging function has been completely shattered this time. In fact, after the emergence and popularization of stablecoins, the few hedging functions that Bitcoin still has have been completely replaced.

This has a far-reaching impact on the future positioning of Bitcoin. Before this, some people bought Bitcoin for investment and speculation, and others for hedging and circulation in times of crisis. After this bloody lesson, no one in the market should still fantasize about Bitcoin as a safe-haven asset, which has a negative impact on long-term demand.

Looking back at the past market conditions of Bitcoin, it is very appropriate to describe it as a "roller coaster". According to statistics, in the past year, there were 8 months with an average monthly increase or decrease of more than 10% in Bitcoin. Earlier in December 2017, Bitcoin hit a record of $19,783, and then the price fell all the way, almost falling below $3,000, a sharp drop of 80% in one year.

Since October last year, Bitcoin has ushered in a bull market under the pursuit of some overseas institutional investors, rising from $10,000 to a maximum of $40,000. In this process, more and more small and medium-sized investors began to follow suit and use loans and derivatives transactions to leverage the currency. This phenomenon has intensified, especially after the price of Bitcoin broke through $20,000 in late December last year.

"From historical experience, a bubble cycle can be divided into five stages: gestation, prosperity, excitement, distress, and recession. The recent market crash and the subsequent rebound are just one of the typical manifestations of the distress stage in the bubble cycle." Li William said.

Bitcoin is a high-risk asset with very large price fluctuations. Surges and plunges are not accidental, but the norm.

The above content is the analysis of the problems and impacts of Bitcoin's surge and plunge by the editor of the currency circle. In fact, the rise of risk aversion will also become a very important factor affecting Bitcoin prices and market conditions. We know that since the outbreak of the epidemic, the global economy has been sluggish, and major central banks around the world have implemented loose monetary policies, pushing up market inflation expectations. However, with the launch of vaccines across the country, the global economic recovery has been promoted. In such an environment, major central banks around the world may gradually withdraw from the existing loose policies. If you want to invest in Bitcoin, you must be cautious enough and pay attention to guard against the risks.