In addition to policy risks, BTC also has technical risks, which are mainly reflected in online transactions
Recently, BTC hit the $40,000 mark, and the cryptocurrency market seems to have signs of recovery. However, although the price of BTC has risen, the volume of transactions has decreased relatively. In other words, BTC has an infinite upward trend, which is actually not good news for BTC, but BTC cannot analyze its trend with a technical perspective.
After BTC has experienced several large fluctuations, it should also wake up some investors. Although BTC and other cryptocurrencies will bring huge profits to speculators, there are also huge risks. After BTC hit a high of $63,000 in April, to a low of $30,000 in May, I can say that I have witnessed the change in BTC's market value throughout the process. I have always insisted that policy changes are one of the biggest risks of BTC. The two major fluctuations of BTC in 2017 and 2021 are enough to illustrate this point.
After experiencing the collapse of BTC last week, I discovered a new problem, the technical risk of BTC. Although BTC has been hyped as a cryptocurrency, few people actually use BTC for transactions. BTC is more like a highly speculative financial product. Most people who hold BTC do not want to use BTC for transactions, but want to make money by hyping BTC. Although BTC is the representative of blockchain technology, few people really use peer-to-peer transactions, and BTC is mainly traded online.
The technical risk of unexpected downtime of BTC is entirely used to harvest retail investors
And BTC transactions on the Internet, whether it is just-needed trading or hype, rely heavily on the trading platform. However, these platforms will lose the chain at critical times, such as downtime and inability to withdraw due to unknown reasons, which is fatal for some BTC investors. BTC fluctuated sharply on May 19, and due to the downtime and inability to withdraw cash on multiple encrypted trading platforms, many investors directly liquidated their positions. This incident has chilled many BTC investors, and some BTC investors have stated that they will withdraw or reduce the proportion of leveraged funds.
If BTC cannot solve the stability of transactions, the downtime problem may happen again, which will be a new risk for BTC. BTC itself is a high-risk financial product. Now in addition to policy risks, there is another technical risk. The technical risks caused by the "unexpected" downtime of BTC are even more harmful than the impact of policy changes on BTC. A netizen’s reply is very characteristic, BTC is so unscrupulously harvested retail investors, even if they have a mine at home, they can’t afford it.
Policy changes may also have a certain reference, let investors know that the general trend is about to change, and give users a chance to survive. Some people who use leveraged funds to speculate BTC actually have a certain psychological tolerance for the regular fluctuations in the market. However, the technical risks of unexpected downtime of BTC are beyond the psychological tolerance of users, and no one knows whether they will be "accidentally" harvested. Moreover, such unexpected downtime is completely used to harvest retail investors, and it is not good for retail investors.
The harvest of unexpected downtime, the risk of BTC is completely uncontrollable
If the price of BTC is a normal rise and fall, whether it is a sharp rise or a sharp fall, someone will profit from it. At this time, whether you buy up or down, it's all luck, and you should be willing to bet and lose if you open the door to do business. But when the exchange went down unexpectedly, even though BTC fluctuated sharply, ordinary users were unable to conduct BTC transactions. That is to say, when BTC trading institutions are down, if BTC fluctuates sharply, it will only cause some contract accounts to "accidentally" blow up. But other users have no chance to buy the bottom, or sell for profit. This is the unilateral harvest of retail investors.
But I haven't traded BTC in real terms, and I don't know if I can set up automatic trading orders like stocks, but even if there are, few people use them. And even if the user has set up a contract for automatic trading, don't forget the BTC transaction limit, the number of transactions per unit time is severely limited. In other words, even if the user sets an automatic transaction order, it may not be able to trade at a critical time. The technical risk of BTC has become one of the biggest risks of BTC hype, and this risk is completely unpredictable.
The policy risks of BTC are generally unfavorable news for BTC, and more for BTC bulls. The risk of unexpected downtime of BTC is aimed at all BTC users, and it can be said that big and small takes all. If BTC cannot solve the technical risk of "unexpected" downtime, I think it is true that, as netizens have said, a gold mine at home cannot withstand such a harvest.
