DeFi has become the protagonist of the current market, and Polkadot complements each other


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Yesterday, the market went out of a different trend as usual. Yesterday it rebounded during the day. At around 6 o’clock in the evening, it rushed to 38,000 US dollars and was blocked. After that, it continued to test 38,000 US dollars, but no effective breakthrough was formed. It continued to pull back around 12 o’clock at night. Until today, before the opening of the market, the lowest position reached a little above 35,000 U.S. dollars, and it was a callback of more than 2,500 U.S. dollars. After the opening, the low point was tested again and then rebounded to above 36,500 U.S. dollars. Overall, it is still mainly to maintain shock.

What was more contradictory last night was the contradiction in the direction between the big brother Bitcoin and the second brother eth. Yesterday, it was obvious that ETH had a desire to try to rise. When BTC rebounded, ETH’s pace accelerated, reaching around 1,300 US dollars at one time. If BTC was stronger last night and showed a desire to hit $40,000, ETH would break new highs is a stable thing, but it was still brought down by BTC’s callback later, which would be a pity for ETH.

The eagerness of ETH is still related to this news: As the price of ETH soars, the supply and liquidity of ETH on exchanges are rapidly drying up. Cryptocurrency analyst Alex Saunders mentioned that ETH demand has grown quite rapidly. According to CryptoQuant, ETH exchange reserves plummeted by 20% within a few hours. The total reserves of the exchange have dropped sharply from US$10 million to US$8 million. If it continues to develop at this rate, the exchange may lose more ETH in the next 48 hours. In this case, the price of ETH may rebound sharply. Lark Davis, another cryptocurrency analyst, said that whales have been “eating” Ethereum in large quantities in the past few weeks. They have bought nearly $3 billion worth of ETH, which accounts for nearly 20% of the exchange supply.

We have previously reminded you of the news, expressing the recent scarcity of ETH, but it does not seem to be valued by the current market, or that the current ETH seems to be unable to drive the rebound of mainstream currencies. With the current shocks of Bitcoin, the capital The flow is not on mainstream coins and Bitcoin, but on other sectors.

During the weekend, the good news on the macro side of BTC is actually not bad. The CEO of Grayscale tweeted that he sold various trust products worth 700 million US dollars on January 16, and the performance has been good since the fourth quarter of last year. It is very impressive. We can also see this from Gray’s fourth quarter financial report, and January 15 is the best day for Gray’s single-day performance. It can be seen that the fourth quarter of 2020 is only the beginning of the enthusiasm of Wall Street institutions for Grayscale. Next, the most important thing for Grayscale is to increase its publicity saying “Everyone can go to Grayscale to buy Bitcoin products” and increase itself. Of cryptocurrency products so that everyone can be more familiar with, understand and actively participate in cryptocurrency products through grayscale.

Not only grayscale, there are currently a total of 99,145 Bitcoins worth $3.65B on the balance sheets of 17 listed companies on Wall Street. The most representative one is Micro Strategy, which currently owns more than 70,000 BTC. After the company’s main business income in the past three years was not as profitable as the BTC it held, it resolutely issued corporate bonds. In financing, more than 600 million U.S. dollars have been raised, and all of them are used to buy Bitcoin. The current total holding price does not exceed 20,000 U.S. dollars. Which company can achieve such a profit.

Based on the rate of return of Bitcoin, this situation will occur more and more often in the future. It is not possible to issue bonds just to buy Bitcoin, but it is relatively easy to use it as one of the company’s configuration. After you have and know Bitcoin All things can be left to Bitcoin for performance, and Bitcoin will increase your charm of continuing to accumulate its holdings.

The current fundamentals of Bitcoin is a bright bull. Of course, everyone should look at it from the perspective of development, rather than just focusing on the current days or even weeks. If you extend the time, you may find that Bitcoin is just In the early stage of the bull market, some people in the current market (Weibo ID: Bitnan) summarized from a data perspective why it is still in the early stage of the bull market, which is of reference value.

1. A large number of high-net-worth individuals have entered the market, and Bitcoin addresses with a balance of more than 1k are gradually increasing, especially on the day of the plunge on January 11, this number is still growing;

2. Since 312, the largest Bitcoin exchange has been completed. After the plunge on January 11, the exchange rate of Bitcoin was second only to 312 last year, indicating that giant whales buy the dip and they have higher expectations for the price of the currency. The coins in Weak hands are getting less and less;

3. There are more and more coins in Strong hands, and they tend to hoard coins. When Bitcoin flows to strong holders, the area in red in the figure will increase. At present, this trend is growing obviously;

4. There are fewer and fewer bitcoins available for trading. Among the 18.6 million bitcoins that have been mined,

No liquidity: 14.6 million pieces

Liquidity: 1.03 million pieces

High liquidity: 2.96 million pieces

In other words, there are currently only 4 million bitcoins (20%) available for trading, and this number will fall.

In general:

There are more and more coins in strong hands, fewer and fewer coins available for trading, and a large amount of institutional funds have not yet entered the market (mainly because the currency is too cheap).

From a long-term perspective, the fundamentals and digital aspects are supporting the development of Bitcoin and the entire encrypted digital currency. The current situation is still only a short-term performance. The current situation is actually very intuitive. After the Bitcoin market has experienced a 10,000-point correction, There is no place that makes the current market shine. Although Gray started to buy coins, but only went to work for three days. The currency bought was limited. The sentiment of just starting a long position was temporarily stifled by the downturn in US stocks, resulting in the lack of market in the short term. Generate momentum to rush higher.

Hot money also pays attention to the rate of return. In the short term, the rate of return of Bitcoin is not high, and the mainstream currency is suppressed by Bitcoin. Even if it flows into the mainstream currency, if Bitcoin has been suppressed, the rate of increase will be limited. The difficulty of the market is relatively high, and the old market DeFi and the recent market’s biggest hot spot Polkadot have become hot money.

For example, AAVE has rushed to the 15th market value ranking, SNX also once squeezed into the top 20 market value rankings, and ranked 21st after the current shock. Other currencies performed very well.

In the DeFi concept sector, yesterday’s gains still saw some familiar figures. 1INCH’s short-lived overnight fame, with a 24-hour increase of more than 40%, and some “old friends” SUSHI, UNI, CRV more or less exceeded The 20% increase is enough to show the recent prosperity of the DeFi market. For example, UNI is the leader of decentralized exchanges, and the rise is undisputed. After SUSHI is merged into YFI, the future development is still expected, and DeFi has value The pattern of the project is obvious.

There is also a currency worth mentioning, which is inextricably related to DeFi, that is, Link and Link are worthy leaders of the oracle. It is not groundless for the oracle to break new highs in the near future. It is driven by the outbreak of DeFi. , Has its own reason for the concept of oracle.

The fiercer the development, the more fierce it is, and the more and more prominent the value of the oracle. As the leader of the oracle, Link will develop more and more solidly after September 2020. Other oracle concepts are not threatening. To the Link project, LINK ushered in the best time to break out.

Regarding DeFi after its silence in September of this year, we said that DeFi will not disappear, but will continue to develop, but it will not continue to be exposed to the public’s field of vision, so you can continue to pay attention to it. It may suddenly break out in a certain period of time. It will amaze the entire cryptocurrency assets. Although the current DeFi currency price shows experience, it is not enough for DeFi. The role of DeFi in the cryptocurrency market will become more and more important.

Another recent bright spot is the Polkadot, and the “handle” of the Polkadot is DOT. At present, there are mixed opinions on the Polkadot market. Supporters believe that it is the “king of ten thousand chains” and will replace Ethereum sooner or later, while opponents believe that it is just a recent hype. Among them, the most representative opinions against Polkadot are It should be mentioned by Jiang Zhuoer yesterday.

1. DOT has not been configured before, now don’t go to FOMO to chase high, otherwise you will be cut.

2. Cross-chain is a pseudo demand. If BTC is digital gold, then ETH is the Internet, on which many various applications (companies) run.

The network has a very, very, very, very, very, very, very, very, very, very, very strong scale effect, which is far far greater than the stored value. You can use a house to store value, you can use stocks, or even use antiques to store value. It can be a hundred flowers, but in terms of network, you can only use the largest network.

3. So there will only be 10,000 nets unified, and there will be no 10,000 nets. Before, China had four backbone networks: China Public Computer Internet (CHINANET), China Education and Research Network (CERNET), China Science and Technology Network (CSTNET) ), China Golden Bridge Information Network (CHINAGBN), now everyone only knows the Internet.

4. Unless there are things on other networks that the main network cannot run, other networks have the value of existence. But it does not exist at present, and there is no application that can only run on other public chains, not on ETH.

The only problem with ETH right now is that TPS (transactions per second) is not enough to accommodate more users. But ETH is not the same as BTC, which refuses to expand. ETH is actively expanding its capacity through rollup and sharding. At present, the expansion of ETH is progressing smoothly.

5. Why are you willing to expand to accommodate more users of ETH, and the total market value will exceed BTC, which is unwilling to expand? Because people (users) are the power that decides everything. A company on the Internet can exceed the number of global users of gold, so the total market value of a company on the Internet can exceed the total market value of gold, let alone the Internet itself.

6. If ETH successfully expands capacity and greatly increases TPS, the result of the public chain will be unified (more than 90% of applications & users on ETH). All public chains are unified, so does cross-chain have any meaning?

Therefore, before the ETH expansion failed, DOT had only speculative value, not investment value. In the short term, it can be used as a speculative product, but don’t stir up feelings and beliefs [laughs without words]

7. I feel that ETH may not be able to expand significantly, so the DOT cross-chain is valuable. The best time to start is the bear market from 2022 to 2023. At that time, all currencies that have emerged in this round of bull market and have not experienced a bear market test will be Will fall to the lowest price against ETH.

But Polkadot also rebutted this statement yesterday. Polkadot officially stated that it is true that cross-chain is a false demand, but the scalability problem of blockchain lies there. Regardless of the current Ethereum, eth2.0 after sharding will have too many restrictions on dapp projects. Excellent projects will be a smart contract for a lifetime, which does not give the project an upward channel. But on Polkadot, you are also a smart contract, you can be a parallel thread, you can be a parachain, it all depends on the quality of the project and the user.

All in all, the most important thing after a new product comes out is not the short-term currency price, but the quality of the project. This will take time to test. It is not all smooth sailing for Ethereum to become the “king of ten thousand chains”. It was also at the beginning. It has been questioned, but it succeeded in gaining a foothold in the market and the largest application of DeFi in the current market. There are not no losers in the middle. For example, EOS also appeared in the name of “Ethereum Killer” at the beginning. The financing in 2017 was so prestigious, it was known as the “tens of billions of dollars” public chain, but what about its subsequent performance?

Everyone is familiar with the concept of Polkadot at the moment, but the most important thing is its practicality and whether it can withstand the test of the market. It is recommended that you still look at it with a conservative perspective, not to praise it too high at once, nor to kill it with a stick. . According to the basic laws of the market, when a new concept comes out, it will experience so many market blows. Whether Ethereum or DeFi, there are bright times and quiet times, but the difference is that after silence Whether it can shine again, this proves that the market recognizes it and its indispensability to the market. At present, Polkadot still lacks this process and needs to wait for its follow-up development.