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Spotlight on U.S. stocks and A-share linkage utility, First Financial Channel 7:30-8:00 “From Wall Street to Lujiazui” opens the market door for you.
Dow up 1.70% at 24,601
S&P 500 up 1.39% at 2,656
Nasdaq up 1.56% at 6,981
International oil prices
WTI March crude futures rose 0.15 percent to $59.29 a barrel after plunging nearly 10 percent last week
Brent April crude futures fell 0.32 percent to $62.59 a barrel, extending last week’s encounter that fell more than 8 percent
International gold prices
COMEX March gold futures rose 0.8% to $1,326.40/oz
The sharp rise and fall, speculative very high has become a significant feature of cryptocurrencies such as bitcoin, with the tightening of national regulation, the price of bitcoin “cut” from the highs in December last year. and is currently near $8,400.
After the global “token fever” of 2017, the market is starting to think longer term – what are the characteristics that make bitcoin so sought after? Is cryptocurrency the “Internet Bubble 2.0”? And if so, how will it end? Is blockchain, the underlying technology, an outright scam? If not, what will it look like in 5 to 10 years?
Today, the focus on cryptocurrencies and blockchain technology is no longer limited to science nerds, but financial institutions are getting deeper and deeper into the field. Recently, Goldman Sachs released an in-depth research report called “Top of Mind” that provides a comprehensive analysis of these issues.
The Goldman Sachs global research team believes that cryptocurrencies are the first experiment in blockchain technology and a classic speculative bubble, just like the “Internet bubble” period, many companies turned into a bubble and the first generation of Internet search has been iterated long ago, some of the current cryptocurrencies The value of some of the cryptocurrencies currently in existence may also become zero in the future, which is not adequately priced in the current market. In addition, Goldman Sachs also believes that in the next 5 to 10 years, blockchain technology will play a more important role in the “sharing economy” and other areas, but this still requires time to nurture, technological innovation and regulatory improvements.
A great token experiment
Robert J. Shiller, a Nobel laureate and Sterling Professor of Economics at Yale University, has previously said about Bitcoin that it is an “interesting experiment”. . “Bitcoin is another very smart idea, and I’m impressed with the technology, but it seems to me that it’s a different kind of technology. I tend to think of bitcoin as an interesting experiment, it’s not a permanent feature of our lives. We overemphasize bitcoin, we should (expand our focus) to the blockchain, and there are other applications for the blockchain.”
First of all, despite the heavy speculation in the cryptocurrency market, it is still no less a disruptive technological experiment in its own right. In the wake of the financial crisis, Satoshi Nakamoto’s paper “Bitcoin: An Electronic Cash in a Peer-to-Peer Network” became a global sensation upon its release, and since then various types of cryptocurrencies have emerged.
Bitcoin seems to have been founded with the intention of replacing fiat money, “I have been working on a new electronic cash system that is completely peer-to-peer and does not require a ‘trusted third party’. Key features include: prevention of double payments via peer-to-peer (P2P) networks; no need for ‘trusted third parties’; participants can be anonymous; new coins are generated via a proof-of-work mechanism; and the proof-of-work mechanism also prevents double payments.” Satoshi Nakamoto wrote.
,” as it is commonly known, is the process by which the Bitcoin system issues its own digital currency, a process in which individual miners compete to mine it. Every 10 minutes, a certain number of bitcoins are awarded to the first person to mine, which is the process by which the computer continuously counts the hashes by exhaustive enumeration. Driven by interest, miners are constantly looking for ways to mine faster, which has given rise to a variety of mining pool nodes on the market. This process is the POW algorithm (Proof-of-work), which is a proof-of-work algorithm.
Jeff Currie, head of Goldman Sachs’ global commodities research team, mentioned that bitcoin mining is not a labor-intensive industry. For example, the largest mine in China accounts for nearly 4% of the network’s computing power, which equates to $400 million in gross profits, equivalent to 657,000 bitcoins, but this mine employs only 50 people; by comparison, in the crude oil market, a comparable country is Canada, which accounts for 5% of global oil production and nearly $100 billion in annual gross profits, but employs 57,000 people. This illustration shows that the manpower behind each unit of crude oil output is four times more expensive than bitcoin mining. However, bitcoin mining is also more energy intensive. The study shows that the amount of electricity used for bitcoin mining around the world this year exceeds the annual average electricity consumption of 159 countries worldwide.
In addition, another superiority of bitcoin is its ease of storage. jeff currie mentioned that even the now obsolete 3.5-inch floppy disk can hold nearly 30,000 private keys, and bitcoin is worth a lot of money.
Bitcoin ownership is established through private keys and addresses, which are similar to bank account passwords and addresses are similar to bank account numbers. Typically, the private key is stored in a bitcoin wallet (app) file and is managed by the wallet software. To create a new bitcoin address, you don’t need an ID like a bank account, you can generate a bitcoin address by downloading a bitcoin wallet from your phone or computer. If someone wants to send you bitcoins, they just need to tell the wallet address.
Goldman Sachs also suggested that cryptocurrencies such as bitcoin are popular in some countries with unstable currencies and capital controls. According to Google’s Google Trends, the most frequently searched places for bitcoin in the past five years are Nigeria, South Africa, and Ghana, all of which have extremely unstable currencies and restricted access to foreign currency.
“Internet Bubble2.0”
Despite the unique superiority of cryptocurrencies like Bitcoin, Goldman Sachs still believes that – the bubble will eventually burst one day.
Right now, the possibility of Bitcoin replacing fiat currencies seems remote. First, there is no central bank regulation behind bitcoin, which makes it difficult to hedge against inflation and keep prices stable, because the supply of bitcoin cannot adapt to changes in demand, which is why the gold standard was abandoned back then; in addition, bitcoin is highly volatile and transaction fees are getting more expensive.
At the same time, many cryptocurrency fanatics harbor the belief that the development of the Internet was accompanied by a huge bubble, and that without speculation and bubbles, it would not be possible to witness today’s technological development; some even believe that there is a “first mover advantage” and a “brand effect” in the cryptocurrency world. “This makes it easier for the earliest tokens, such as Bitcoin, to survive and retain their value over time.
However, Goldman Sachs doesn’t buy this view. Steve Strongin, head of global investment research at Goldman Sachs, hit the nail on the head with his rebuttal argument – “first-mover advantage” is a bit old-fashioned in any industry. “The fact is that cases of first-mover advantage are hard to find. For example, neither the first generation of Internet browsers nor search engines survived for long. In the cryptocurrency space, the price of many cryptocurrencies is very volatile, not just Bitcoin, and it’s hard to tell who the winner will be in the end, as you can see from the market itself.”
Steve Strongin warns investors of the risks – the frenetic attitude people have right now, as if they think that eventually all cryptocurrencies will survive or retain their value. “However, the high positive correlation between different cryptocurrencies worries me. Unlike a rational market, the issuance of numerous new tokens does not seem to reduce the value of older tokens, which all look like the same asset class. If this is a ‘winner-takes-all’ situation, then investors will need to impair the value of future extinct tokens. Also because of the lack of intrinsic value, the trading value of tokens that don’t survive could end up being zero.”
He agreed that this is the major difference between cryptocurrencies and fiat currencies. “If a government decides to void a cryptocurrency, its generally going to judge its residual value and use a new fiat currency in exchange for it.”
In addition, he mentioned that “this [cryptocurrencies] is not the same as securities, where stocks are tied to earnings growth, but the current value of cryptocurrencies seems to be based on the returns people imagine cryptocurrencies will be able to give in the future, but that definition is itself a bubble.”
“Even if someone believes that blockchain technology could one day change the world, they would have a hard time explaining why cryptocurrencies have skyrocketed up and down, and even ‘waived’ in the recent past. This volatility itself also implies speculative behavior.” He claimed.
In Goldman Sachs’ view, this era may end up like the bursting of the Internet bubble, with the very few surviving companies being the more valuable. Amazon and Google is the survivor of that year, but now the Amazon has long been not then the model, and in addition to the fledgling Google, many other search engine companies are unable to create value and eventually fade away.
need to think about is, today there is like the then Amazon, Google such companies? Will they eventually turn out to be the losers who did nothing? Goldman Sachs believes that most cryptocurrencies may never return to the peak of their past value.
Blockchain technology has long-term value
With the cryptocurrency bubble blowing more and more aggressively in 2017, even blockchain concept stocks have started to be subject to explosive speculation, and many companies have hit the blockchain concept in order to boost their share prices.
Despite this, Goldman Sachs believes that blockchain technology is still a very transformative technology, and its transparency, security, and efficiency may make it a good choice for reshaping the business environment. Goldman Sachs believes that blockchain will be better used in three major areas or scenarios.
is first of all the “sharing economy”. The essence of the sharing economy is to create economic value for both parties through peer-to-peer sharing of information or resources on the basis of mutual trust between unfamiliar parties. However, there is no way to establish trust between unfamiliar parties, and resource sharing transactions are completed through centralized platforms like Airbnb, Drip, and Mobay that can guarantee the fulfillment of promises. However, once the centralized platforms have problems, there will be a sharing trust crisis.
Therefore Goldman Sachs believes that there is some degree of complementarity between the decentralized, decentralized, autonomous mechanisms and other key points of blockchain technology and the sharing economy in terms of the need to open up peer-to-peer channels of mutual trust at the individual level.
Second, Goldman Sachs sees the sharing of electricity as a better scenario as well. Lawrence Orsini, founder of Brooklyn-based microgrid developer LO3, has previously said, “If you’re producing energy far away, there’s a lot of loss in transit and you don’t get value. But if you’re right across the street, you can use the energy efficiently.”
The way he sees it being practiced includes the existence of an energy microgrid in an area where each household may be a producer or a consumer. Some households have solar panels and the surplus is the value of electricity that can be sold, assumed to be in units of 1 for simplicity, and households that need electricity can buy it from households that have enough surplus. The account private key should be generated by the client installed locally.
Some industry insiders also told reporters that the current security applications of blockchain technology in the energy internet mainly include “secure identity authentication”, “secure data sharing”, “electricity The purpose is to enhance the credit between people and people, things and things, and people and things in the energy Internet.
In addition, Goldman Sachs also believes that blockchain technology can streamline the process of securities clearing and settlement in the future, reducing errors and improving efficiency.
Goldman Sachs also proposed that the early prototype of blockchain technology has emerged, and limited market applications will unfold in the next 1 to 3 years, and will continue to spread in the next 5 to 10 years, but the broader application may take another 10year, as this still requires regulatory refinement and still takes time to spread widely in large markets.
Market News
China’s January new yuan loans of 2.9 trillion yuan
China’s January financial data went higher, in addition to the social financing scale is less than expected, M2 money supply growth and new credit are more than expected, new credit even reached 2.9 trillion yuan, significantly more than the previous value of 584.4 billion yuan . At the end of January, the balance of broad money (M2) 172.08 trillion yuan, up 8.6% year-on-year; narrow money (M1) balance 54.32 trillion yuan, up 15% year-on-year.
The increase in social financing scale in January was 3.06 trillion yuan, 636.7 billion yuan less than the same period of the previous year.
Preliminary statistics, the increase in social financing scale in January 2018 was 3.06 trillion yuan, 636.7 billion yuan less than the same period of the previous year. Among them, RMB loans issued to the real economy increased by 2.69 trillion yuan in the month, an increase of 371.7 billion yuan year-on-year.
连平：M1 rebound may be related to the structure of credit resource placement, etc.
Bank of Communications chief economist Lian Ping believes that the January credit increase is now a historical peak, in addition to seasonal factors there are also some of last year’s investable loans deferred to the beginning of the year. The company’s business is a major player in the market, and the company’s business is a major player in the market, and the company’s business is a major player in the market, and the company’s business is a major player in the market, and the company’s business is a major player in the market, and the company’s business is a major player in the market. And M2 growth rate is relatively stable thanks to the prudent monetary policy, the future will continue the trend of small fluctuations in growth rate.
Two ministries: pure public welfare projects shall not be declared as fund-raising projects corporate bonds
The General Office of the National Development and Reform Commission, the General Office of the Ministry of Finance notice proposed that public schools, public hospitals, public cultural facilities, parks, public squares, office buildings of institutions, municipal roads, non-toll bridges, non-operating water conservancy facilities are strictly prohibited The public welfare assets and reserve land use rights such as public schools, public hospitals, public cultural facilities, parks, squares, office buildings of public institutions, municipal roads, non-toll bridges, non-operating water conservancy facilities, non-toll pipe network facilities, and other public welfare assets and reserve land use rights are counted as assets of the declared enterprises; it is strictly prohibited to use PPP mode to raise debt financing illegally or in disguise.
农业部:研究制定实施土地承包期再延长30年的政策
February 12, the official website of the Ministry of Agriculture released “2018 rural management work points”. The Essentials of Work is divided into 26 articles in four areas. In continuing to deepen the reform of the rural land system, stabilize and improve the relationship between land contracting, the “Highlights of Work” pointed out that the new era to deepen the reform of the rural land system, to focus on the main line of dealing with the relationship between farmers and land, adhere to the “three rights of separation” major theoretical innovation as a guide, to further consolidate and improve the basic rural management The
SZSE: will strengthen the supervision of mergers and acquisitions and restructuring to enhance the ability to serve the real economy
SZSE issued a paper in the evening of February 12, 2017, strictly review “suspected of circumventing the restructuring of the listing” program, focusing on abnormal restructuring program; 2018 adhere to the service The main line of supply-side structural reform, effectively strengthen the supervision of mergers and acquisitions and restructuring, and enhance the ability of the capital service market to serve the real economy.
SSE: 2018 focus on supporting new technologies and other mergers and acquisitions and restructuring into listed companies
The SSE issued a paper on Monday saying that in 2018, it will continue to strictly regulate mergers and acquisitions and restructuring based on the focus on supporting new technologies, new industries, new products through mergers and acquisitions and restructuring into listed companies, and continue to support the mergers and acquisitions of overcapacity industries and capacity out of clearing, providing a package of services in terms of rule optimization, policy consultation, program adjustment, training and guidance, technical protection, etc.
新华网：虚拟货币禁止应升级 Implement penetrating regulation
有专家指出，对当前的ICO项目转移到国外的現象，相关监管部门可以根据相关法律法规，以规制，防止敏感数据流失，防范跨境犯罪风险，维护金融消费者利益、金融稳定和国家安全 . When necessary, other more severe regulatory measures can also be taken in accordance with the law, such as cutting off access links until the legal responsibility of the relevant responsible persons in accordance with the law.
Most brokerage firms tighten stock pledge business
According to the official microblogging of brokerage firms in China, most brokerage firms have tightened their stock pledge business and are very cautious about adding new business and slowing down project approval due to the fact that the specific implementation details of the new stock pledge regulations are not yet fully understood, coupled with the greater risk in the recent market.
Bloomberg: Chinese regulators give window guidance to support stock market
According to Bloomberg, people familiar with the matter said that in response to last week’s plunge in the stock market, the China Securities Regulatory Commission and related regulators gave window guidance over the weekend to support stock market stability. The guidance included encouraging some listed companies’ major or controlling shareholders to hold more shares, asking some brokerage firms to provide a summary of last week’s trading and a forecast and plan for this week’s trading, and also urging some funds to limit selling and not to show net selling.
