Author: Apatheticco
From December 5th to 6th, “Believe in the Future-2020 World Blockchain Conference Wuhan” officially opened at Wuhan International Convention and Exhibition Center. The conference was hosted by Babbitt and received strong support from Wuhan Municipal Government, Jianghan District Government, Wuhan Municipal Bureau of Economics and Information Technology, and China Academy of Information and Communications Technology.
At the “New Infrastructure, New Kinetic Energy—HashCon·Wuhan Station” event on the afternoon of the 6th, Binyin founder Pan Zhibiao, Ballet Wallet founder and CEO, digital asset security expert Bobby Lee, and Time Stamp Capital CEO Li Zong Multiply, Meng Yan, co-founder of Youzheng Liantong and deputy dean of the Digital Asset Research Institute, Max Hu, head of Hash Power 360 operations, and Gao Yin, director of Fidelity Investments (Boston) participated in the roundtable forum “Countdown to $20,000! BTC Big You can’t imagine a bull market.”
The following is a selection of roundtable content, compiled and released by Babbitt.
Q1. Is it a big bull market now? If it is a big bull market, what characteristics can be seen as a big bull market?
Gao Yin : From the historical price trend of Bitcoin, it should be said that we are in the fourth bull market cycle of Bitcoin. From the perspective of institutional investment, we see an increasing influx of institutional funds into digital asset allocation, and an explosive increase in institutional investment in researching Bitcoin and building its ecosystem. From a retail perspective, there are already a lot of third-party data that reflect the characteristics of the bull market, such as the simplest Google search for Bitcoin. The current search volume is already very high, but it has not yet reached a record high. In general, Bitcoin is still in a bull market trend and cycle (Note: The above is the personal opinion of the guests and does not represent Fidelity Investment). Max Hu : We found that the USDT price has inverted, resulting in a negative premium, which means that more and more retail investors are leaving the market. Large institutions are buying on a large scale. A report mentioned that 36% of institutional investors in the United States and Europe are already deploying digital currencies. This big pattern is relatively obvious, and institutional investors will become the mainstream in this industry .
Traditional institutions have better channels and face a broader C-end market, which can attract the C-end market to enter this emerging industry. The value of a network depends on the square of the number of nodes in the network. As more and more people come in, the market value of Bitcoin will naturally rise, and the price of Bitcoin will definitely enter higher ground.
Li Zongcheng : It is indeed a bull market now. The characteristic of the bull market is that prices continue to rise, and the big bull market can only be confirmed when looking back .
Don’t be too optimistic in the bull market, you must stay calm and don’t invest money that you cannot afford to risk. In the process, we must constantly improve our knowledge, learn more, and strive to be at the forefront of investors and become a winner.
Bobby Lee : We have not yet reached the bull market. In the bull market, we have to break 20,000. It is more difficult to break $20,000. Now it is the tail of a bear market . In my opinion, the bull market is in the first quarter of next year, and it will only break $20,000 in January, February and March next year. Why is it difficult to break 20,000? Many people will place an order to sell Bitcoin at $19,999.
Pan Zhibiao : We are already in a bull market . From 4,000 US dollars in March to 20,000 US dollars, it has been five times. If you think that it is not a bull market, it is not too logical.
The community is shouting every day that the altcoins they buy are not going up, but Bitcoin is going up crazy. Behind this is the cruelty of capital. Big capital will choose seed players first, and Maotai stock is also constantly rising. Therefore, mainstream assets rise first before it is a big bull market. It is not right for junk assets to fly all over the sky. The bubble is actually very big.
For trading players, you still have to control your own leverage. Once the bull market comes, the fluctuations in 20,000 US dollars are very large. Mining circles should also pay attention to production and operation risks, and control risks in advance.
Q2: Where can the Bitcoin market rise?
Panzhi Biao: this wave of conservative estimate of about 20 million dollars, will be a little crazy to $ 500,000. BobbyLee : My personal view is that the bull market will start next year and will end next year, reaching a maximum of $330,000 at the end of next year . Next year, Bitcoin should break through 100,000 and 200,000 U.S. dollars, and it won’t be surprising that it will fall to 200,250,000 U.S. dollars. The highest I believe is 300,350,000 U.S. dollars.
Li Zongcheng : I am still cautiously optimistic about the bull market this time. Even if this bull market comes, it will not be that big . In terms of price, there will almost be a big correction, because its fundamentals cannot increase significantly, unless the expansion of Bitcoin can be realized in the near future, or there is a similar Ethereum in the blockchain New projects come out, bringing more users to the industry.
Meng Yan : I think the bull market has already arrived, and I have to look at it if I don’t use it as a “big” word.
Max Hu : Zong Cheng and I have similar ideas. In fact, I don’t quite understand this. Mining doesn’t think much about speculation. My friend believes that in the short term, Bitcoin will break 20,000 to see 28,000 US dollars, and return to 15,000 if it does not break 20,000. This is his short-term forecast. The first two are all about long-term forecasts. If so, I boldly guess, 288,000 US dollars .
Gao Yin : Many well-known institutions have already given their expectations for Bitcoin prices in 2021 very clearly, so I won’t go into details here. But I think that instead of predicting the exact highest point and trying to reach high, it is better to spend enough energy to study how to control your position, analyze the value of digital assets, and learn long-term investment strategies. We can refer to the practices of some mature institutions that have done very well over the years. They use a time- or cost-weighted method. That is to say, when they reach a certain period of time, or the price point of their psychological expectations, they will partly withdraw from the profit. A smart investor should try to learn part of the profit, and part of the long-term holding (Note: the above is the personal opinion of the guests, does not represent Fidelity Investment).
Q3. Why did Bitcoin soar this year? Is it really because of the agency’s entry? Are there any other factors?
Meng Yan : Organization is definitely the main reason, but I think there are other reasons. In 2000 there is a CCTV Cui Yongyuan, Zhao Benshan and Song Dandan piece, Zhao said a word now very popular, “aunt you have not your aunt, your uncle or your uncle.” I want to take over this sentence, in fact, a bit The currency is still Bitcoin, but the US dollar is no longer the US dollar . 1 Bitcoin is now worth $19,000. Is it still $19,000 a year ago? Is it still $19,000 in December 2007? From the establishment of the Federal Reserve in 1913 to 2008, only 4 trillion US dollars were printed. From 2008 to 2019, 16.5 trillion US dollars were printed at once. From March this year to now, nearly 10 trillion US dollars have been printed. So the US dollar is no longer the US dollar. I have probably calculated it now. If, according to the situation of this year’s epidemic, it is conservatively said that global GDP has regressed by 10% and the central bank has printed currency by 50%, this 60% can explain the 60% rise of Bitcoin. If our Bitcoin is calculated in this way, divided by 1.6, it has not reached the highest point last year. I agree with what Bobby Lee said. Now it can be said to be the tail of the bear market.
On the other hand, this is a reward for Bitcoin. Everyone has been looking for something that can truly fight inflation. In the long term, houses will not be able to fight inflation. Now let’s look at what Bitcoin can do.
Gao Yin : The data show that it is indeed that the interest of institutions is getting stronger . This is reflected in two aspects. On the one hand, Grayscale Funds continue to increase their holdings of digital assets such as Bitcoin and other institutions have increased the allocation of GBTC or Bitcoin; on the other hand, the investment of traditional financial institutions in infrastructure construction has been in the past. The rapid growth in the past two years has been used to establish a reliable digital asset investment ecosystem to meet the custody and transaction demands brought about by the influx of larger funds. And the investment of institutions has not started recently. Take Fidelity as an example. We have been mining since 13 years, and even the CEO’s office has a mining machine. Some far-sighted institutions have been silently investing and accumulating for a long time.
In addition, we should not only observe the changes in the holdings of some institutions, but also focus on the macroeconomic and global capital flows, especially with reference to the US dollar funds, which account for a very high proportion of wealth, to judge the development of the megatrend (Note: The above is the personal opinion of the guests. Does not represent Fidelity Investment).
Bobby Lee : The rise so much has something to do with the printing of money that Ms. Meng Yan just said. But there is another reason why it has risen so strongly, and that is Bitcoin itself. The total amount of Bitcoin is fixed. It has experienced three halvings. Each halving halved the daily production. From 7,200 bitcoins a day, then 3,600, 1,800, and only 900 bitcoins were produced every day after May this year. . It will be halved in another three years, when only 450 bitcoins were produced per day. Within ten years, the daily output has been reduced from 900 to 225 today. I think that the halving every four years is the factor that causes Bitcoin to rise .
Pan Zhibiao : The nature of the price increase is because of supply and demand. When more funds are bullish, they will start to rise. Bitcoin has no fundamentals. The only point of Bitcoin is consensus. When everyone’s consensus continues to increase, the price of Bitcoin will keep pushing up . In 2013 and 2014, it was not easy for investment institutions to enter the market, because they bought 100 million U.S. dollars and bought bitcoins as if they didn’t look good, and the price deviation was very large. Now the volume is relatively large, so it has become an alternative asset that many institutions can configure. When the consensus is constantly strengthening, and many of the new players are professionals, investment companies or institutions, their operation methods will be more fierce, because they see that a thing will be done in a more intensive and efficient way.
From financial derivatives to the maturity of DeFi, and then to the strengthening of institutional consensus, they eventually promoted the rise of the entire model. Teacher Meng Yan said that the central bank’s release of water is also a factor. After the release of water, the devaluation of capital will inevitably buy anti-inflation.
Q4. Bitcoin as a decentralized asset, is its pricing power controlled by who?
Bobby Lee : Bitcoin’s pricing power is not important . Unlike traditional assets, products, and investment products, which have pricing power, Bitcoin’s characteristic is that it is traded around the world 24 hours a day. The price of each trading platform is different. Prices are different in every country and will change. There is arbitrage, and there are reasons for foreign exchange controls in different countries. The meaning of pricing is not great. Li Zongcheng : Pricing power is not determined by an individual or country, but by the market . The Bitcoin market is open to all countries and everyone in the world, free to participate in buying and selling, and the price is determined by buyers and sellers.
Meng Yan : It is questionable whether this matter can be called pricing power. The right is that if I want it to rise, it will rise, and if it falls, it will fall. Whether there is a group that has such power, I think this matter is suspicious. Although there are still some people in this market who have the ability to make the price reach their goal at a certain moment, I think this market is dynamic and constantly undergoing various changes.
Q4. Apart from Bitcoin, are there any projects on the market worth paying attention to?
Pan Zhibiao : Everyone’s investment strategy must follow logic. Bitcoin’s market value accounts for 60% and 70% of the total. Compared with other altcoins, its proportion will only be higher. Why don’t you hold bitcoins, and don’t hold the industry’s super leaders? This is a strange thing. Altcoins don’t have much endogenous value. From 13 to 17 years, the top 10 and top 50 coins will have a super large rotation every few years. The life cycle of many projects is over. You still hold an old thing to carve a boat and beg a sword, and look forward to the blossoming of the old tree in another spring. This logic is more ridiculous. When it comes to prices, many forecasting models are actually not reliable . Bitcoin has only gone through three cycles, but the model uses this to predict the future. You think how unreliable this thing is. Bitcoin has only consensus and is unique, and all other things are appearances and do not have much meaning.
On the other hand, DeFi is very strong this year. But there is still an important piece missing in DeFi, and Bitcoin as the industry’s largest asset has not entered on a large scale. At present, Bitcoin-anchored coins such as tBTC adopt a margin system. The Bitcoin-anchored coins minted by users can never exceed the asset size of the margin. After all, the size of Ethereum is too different from Bitcoin. We need real and better decentralized solutions before users are willing to invest tens of thousands of bitcoins into DeFi. Once DeFi assets expand 10 times, many new models will be born and many new things will come out. And when the amount of funds reaches a certain scale, everyone finds that it can still be played, and new qualitative changes may occur with changes in the size.
The DeFi field is still focusing on projects that try to solve the performance problems of Ethereum. If you don’t have the time and energy, or if you feel that the technical threshold is too high, you can invest according to the configuration of mainstream institutions. The simplest thing is to look at the allocation ratio of those funds, how much Bitcoin is added, and how much Ethereum is added, just copy it according to the table, so many professionals are definitely smarter than retail investors.
Bobby Lee : In Chinese culture, when you get married, you want to give something, you want to give gold. No one said that gold is too expensive, buy some copper, iron, and aluminum. The precious metals are platinum, gold, and silver, and copper, iron, and aluminum are not precious metals. In the same way, Bitcoin is the real digital asset . Buying other altcoins is the mainstream currency if it sounds good, or junk coins if it sounds bad. These junk coins are not assets.
Li Zongcheng : I have a big disagreement with the previous two on this issue. Mr. Pan and Bobby are very senior early players. They have deep investment in the Bitcoin industry chain. The two entered the industry very early and hold a lot of Bitcoin. For the latecomers, only by relying on new projects and new opportunities can they catch up with the two, or even surpass the two.
First of all, I think the market value of Bitcoin will continue to become smaller, because Bitcoin does not represent the entirety of blockchain technology. It is just one of the ways to realize it, and this way of realization is solidified, there is no more Innovation. Bitcoin is positioned as a digital currency, and Ethereum still has an advantage over Bitcoin that is programmable digital currency. The development of smart contracts has made many people see that the blockchain is indeed valuable, unlike Bitcoin that is only used for buying and selling. Can bring a strong shock to the traditional field. This is the charm of blockchain technology. As the new value of blockchain technology continues to be discovered, the total proportion of Bitcoin will become smaller .
The second question is whether there are new projects whose market value will exceed Bitcoin. If the market value of a new project exceeds Bitcoin, then it may achieve greater benefits in the future. Some people often say that because Bitcoin currently accounts for the largest market value, it will also be the largest in the future; because Bitcoin now has the largest consensus, it will always maintain the largest consensus in the future. I don’t think so. Everything is waiting to be surpassed, surpassed by new projects, and surpassed by new ideas . I think there are two projects that have a glimmer of hope to surpass Bitcoin, one is Ethereum, and the other is Polkadot. The former turns a simple digital currency into a programmable digital currency and further enhances the flexibility of use; the latter changes from a programmable digital currency platform to a heterogeneous multi-chain network, not only contracting at the digital currency level Abstraction, and a higher level of abstraction of the chain makes the development of the blockchain more meaningful. Only by surpassing in concept can it be possible to surpass in market value.
As for the observation of new projects, I think it basically conforms to the two-year law of the Internet . On some new projects, we will observe that if the project does not start within two years, it is likely to die in the future. If it rises up, it will be the leader in this industry, and it will most likely become the leader in this track direction. This is my point of view.
Meng Yan : Bobby’s and Zongcheng’s two views have their respective correct points. Bobby’s view is that Bitcoin is always strong. I think it makes sense because it is an asset. At present, the world’s largest company is Apple, with a market value of US$2 trillion, and the total market value of gold is US$8 trillion. Perhaps in the future, the company will actually reach a market value of US$10 trillion, but time cost must be considered because we don’t know. When will this happen? In the case of our limited lives, we can still think that the value of owning assets will be higher than the value of owning the company. This is what I agree with Bobby.
In addition, I also agree with Zongcheng’s view. Rich people have the capital to talk about asset portfolios, and 8%-40% of the income a year feels good. The poor must strive for higher multiples, otherwise they will not be able to achieve a class jump.
Q5. What might be the trend in 2021? What will heat up next year?
Max Hu : A big investor in the investment industry asked us a question before, is there any way to increase your passive income by more than 30 times in the next ten years. Go back and say, if you have core real estate in first-tier cities, the passive income in ten years may exceed 30 times. You have invested in stocks of BAT and FANG technology companies, and your passive income may exceed 30 times in ten years. The other is Moutai. The first is to benefit from the development of China’s urbanization; the second is to benefit from the benefits of the 4G mobile Internet era; the third is to be promoted by China’s growing middle class. The dividends of the three eras have increased passive income. So, where will your passive income be in the next decade? I hope it is Bitcoin. And the best way to get Bitcoin, I personally think it is mining. Under the current currency price, the cost of mining is 25%-35% of the cost of buying Bitcoin. Is it unhappy to get bitcoin at such a low discount? Mining is always cool, and the foundation inherited for a century is mining.
Gao Yin : This year, you saw many exciting projects in DeFi, and also saw some ideas that might change the world. Just as we have seen financial technology subvert many areas of traditional finance, I look forward to seeing DeFi projects with innovative ideas and hardcore technology that can challenge or even subvert some financial technologies in the future.
Asset allocation is the hard-won accumulation of wealth. I have to share a story that has always moved me. At Fidelity, some investment managers will post pictures of their clients’ family portraits next to their computer screens to remind them of the important tasks they undertake. We still do this for our clients’ asset management. We hope that everyone will be cautious in their investments and never follow suit. Pay attention to and learn from the hot spots, but you should do more in-depth research on the technology behind, analyze and judge the value independently, or listen to the suggestions of professional investors.
A successful investor should do regular review . With the high uncertainty and difficulty brought by digital asset investment, it is decided that everyone should constantly ask themselves why they made the investment decision at that time and what needs to be changed and improved. (Note: The above are the personal opinions of the guests and do not represent Fidelity Investment).
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