Behind the explosive surface of the cryptocurrency circle

In the wave of financial technology, the cryptocurrency industry has always been a highly anticipated presence. The explosive performance of stablecoin issuer Circle on its first day of listing shocked Wall Street with a nearly 170% increase, making the "cryptocurrency circle" once again the global focus. However, when we break away from the surface prosperity and delve deeper into the internal logic of the cryptocurrency circle, we will discover that there are many complex problems and huge risks hidden behind it.

On its first day of trading, Circle closed up nearly 170%, with a surge of 235% during trading. This achievement not only made it the most anticipated cryptocurrency company IPO debut since Coinbase's direct listing in 2021, but also caused the entire cryptocurrency industry to boil over. On the surface, this seems to be a major milestone in the development of the cryptocurrency industry, indicating that the cryptocurrency industry is about to usher in a new wave of growth.

The successful listing of Circle has attracted a large influx of funds and given more cryptocurrency companies hope of going public. For a while, the candidate pool for cryptocurrency IPOs has been growing, with plans to go public from cryptocurrency custody company BitGo Inc., veteran cryptocurrency exchange Kraken, billionaire Winklevoss twin brother cryptocurrency company Gemini, and digital asset exchange Blockchain.com. These news have further raised market expectations for the cryptocurrency industry, causing its popularity to continue to climb.

But behind this, there are actually many hidden dangers. The popularity of the cryptocurrency market is largely driven by speculation and hype. Many investors enter the cryptocurrency industry not because they truly understand and recognize the value of cryptocurrencies, but because they have dreams of overnight wealth and hope to make a fortune in this uncertain market. This speculative mentality causes great volatility in the cryptocurrency market, with prices often deviating from their actual value, forming huge bubbles.

Taking Bitcoin as an example, its price has experienced multiple ups and downs since its inception. In November 2021, Bitcoin set a record of $68999.99 per coin, but then fell into a long bear market, with prices plummeting at one point. In 2024-2025, the price of Bitcoin will rise sharply again, breaking through the historical high of $81000. This roller coaster like price trend has caused many investors' wealth to evaporate or shrink significantly in an instant.

The underlying technology of cryptocurrency is blockchain. Although blockchain technology has advantages such as decentralization and immutability, it is still in the early stages of development and has many technical challenges and security risks. For example, the scalability issue of blockchain has not been effectively resolved, resulting in slow transaction processing speed and high transaction costs; At the same time, blockchain systems also face risks such as hacker attacks and network security. Once a security incident occurs, investors' assets will face serious threats.

In addition, there are a large number of fake projects and fraudulent activities in the cryptocurrency market. Some criminals take advantage of investors' lack of understanding of cryptocurrencies and issue virtual currencies under the banner of blockchain, engaging in illegal fundraising and fraud activities. These projects often lack actual business support and only attract investors through speculation and hype, ultimately resulting in investors losing all their money.

The popularity on the surface of the cryptocurrency market has attracted more and more investors to enter. However, for ordinary investors, the cryptocurrency market is not an easy place to make money, but is full of risks and challenges. Before entering the cryptocurrency industry, investors must fully understand the relevant knowledge of cryptocurrencies, recognize the risks involved, and make cautious investment decisions.

Investors should remain rational and calm, and not be misled by the myth of sudden wealth in the cryptocurrency industry. It should be understood that any investment carries risks, and no investment can guarantee a steady profit without loss. During the investment process, it is important to allocate assets reasonably based on one's risk tolerance and investment goals, rather than investing all funds into the cryptocurrency market.

At the same time, investors should raise their risk awareness and learn to identify and prevent various risks. Choose legitimate trading platforms and investment projects, and avoid participating in illegal virtual currency trading and investment activities. During the investment process, it is important to closely monitor market dynamics and changes in regulatory policies, and adjust investment strategies in a timely manner to reduce risks.

The hype on the surface of the cryptocurrency circle is just an illusion, and there are many risks and problems hidden behind it. Regulatory risks, market risks, and technological risks have all brought uncertainty to the development of the cryptocurrency industry. For investors, when facing the temptation of the cryptocurrency market, they must maintain a clear mind, invest cautiously, and not blindly follow the trend. Only in this way can one protect their assets and avoid unnecessary losses in this risky market.