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In recent days, a series of events have occurred, all of which are extremely small, but they preview the upcoming decisions.
Just last weekend, everyone suddenly discovered that the NBA ban was lifted. Another interesting thing was that it temporarily and conditionally resolved the issue of Internet access. Of course, it was cancelled later. On the second day, two heavy messages appeared: one was the Guangzhou Futures Exchange, and the other was “Opinions on Further Improving the Quality of Listed Companies.”
In fact, the Guangzhou Futures Exchange had a rumor early in the morning, and it was confirmed last weekend. On October 9, the China Securities Regulatory Commission officially announced the establishment of the preparatory group in Guangzhou. With the approval of the State Council, the China Securities Regulatory Commission decided to establish the preparatory group for the Guangzhou Futures Exchange to start the preparatory work for the Guangzhou Futures Exchange.
In fact, as early as 1992, Guangzhou had China’s first futures brokerage company. In the 1990s, the overall futures trading accounted for the first place in the country. It was just because it was too early and the overall mechanism was not perfect, so it appeared in 1996. Was suspended during the clean-up and rectification.
The Guangzhou Futures Exchange is the first futures exchange to be released by the CSRC for the first time in 26 years. The significance and value of the signal are self-evident. Why are futures important? Because as long as China is to become a financial power, this step must be taken no matter what.
The core of the futures market has two major functions: one is to manage forward risk through leverage. For example, prices of various commodities and agricultural and sideline products. Companies can lock in prices in advance through forward contracts for market management hedging.
Because commodities for general futures are often in huge demand, market globalization is obvious, and they are not easily manipulated. After all, the market is wide, and a certain form of monopoly cannot be formed. Therefore, futures exchanges are expected to stabilize business operations and stabilize the market. Order has a profound impact.
Another important function of futures exchanges is “pricing power.”
For a long time in the past, China was the world’s largest oil importer, but because my country’s own financial development stage determines the system and the system is relatively weak, so there is no pricing power in the bulk of oil, the world’s largest The futures exchange for oil pricing power comes from WTI crude oil in the United States and Brent crude oil in the United Kingdom.
Without pricing power, they can only become lambs slaughtered in the market. Whoever can formulate rules has power. This is a constant truth throughout the ages. However, in addition to the Guangzhou Futures Exchange that is under preparation, China already has four futures exchanges, namely the Shanghai Futures Exchange, China Financial Futures Exchange (Shanghai), Zhengzhou Commodity Exchange and Dalian Commodity Exchange.
Among them, the main trading varieties on the Zhengzhou Stock Exchange are wheat, cotton, sugar and other crops, while the Dalian Commercial Exchange is mainly for soybeans, corn and other grain varieties, both of which are more inclined to agricultural and sideline products. The Shanghai Futures Exchange mainly focuses on non-ferrous metals, fuel oil, natural rubber, etc., while the CICC mainly focuses on stock index futures and government bond futures. The vast majority of futures trading varieties are completely covered.
Now that the coverage is complete, why should there be a Canton Stock Exchange to announce so much fanfare and solemnly? There is a very important detail here, that is, the central government has repeatedly emphasized that the Canton Stock Exchange will be an “innovative” futures exchange.
As early as 2015, when submitting the Canton Stock Exchange report, it was proposed that the first product that it hoped to go online was carbon emissions trading. This is indeed an innovative product, but in the “Opinions on Financial Support for the Construction of the Guangdong-Hong Kong-Macao Greater Bay Area” issued by the four ministries and commissions of the Central Bank in May this year and the announcement issued by the China Securities Regulatory Commission today, they only mentioned “studying the establishment of Guangzhou futures Exchanges” no longer specifically mention “carbon emissions”.
At the same time, some news pointed out that the Ministry of Ecology and Environment has no objection to the establishment of the Guangzhou Futures Exchange, but said that the current carbon emission spot market has not yet started operation, so the conditions for launching futures are immature. It is recommended to delete carbon emissions from the establishment plan of the Guangzhou Futures Exchange. Futures related expressions. Expanded the adjustment and expansion of listed products to “service green development, Guangdong-Hong Kong-Macao Greater Bay Area and the construction of the “Belt and Road” futures products”
This is very interesting. What kind of commodities are the futures products that conform to the construction of the “Belt and Road”? If we combine the two functions of futures trading with a special commodity, the answer is ready to come.
This special commodity is called currency. Futures exchanges can determine currency pricing power and conduct forward management.
Only the internationalized renminbi is the most suitable futures product for the “Belt and Road”. As I have repeatedly stated in my previous article, any currency needs an anchor point. There is only one anchor point for the future of RMB internationalization, that is The central bank’s digital currency DCEP. Combined with the Shenzhen digital currency red envelopes that have been screened for these two days, I have a bold guess:
Guangzhou Futures Exchange may gradually become a digital currency futures exchange, listing Bitcoin, Ethereum and DCEP, namely digital gold, digital silver and digital renminbi.
Logically speaking, the establishment of a digital currency futures exchange is more in line with development needs. After all, at such an early stage, the volatility of digital currency prices is too great, far from ordinary people can bear, but the development of a Chinese Bakkt exchange is different. On the one hand, this threshold allows institutions to start entering the market in a fair way, and on the other hand, it allows large investors who can afford to invest in the market.
Even if it goes online, it is impossible to have too many varieties online, it must be limited. The main role is to stabilize the international exchange rate of RMB, and the other is to resist the decentralization of Wall Street’s control of Bitcoin. Therefore, there is a reason for the delay in releasing the specific online varieties. After all, it is necessary to wait for all conditions to be met, and then one-time announcement will have greater explosive power.
As I wrote in my previous article, China’s Silicon Valley may appear in Nansha, Guangzhou in the future. I have reason to believe that the final location of the Guangshi Institute is likely to be in Nansha. I have been in Guangdong recently, especially on the occasion of the 40th anniversary of Shenzhen. Because it is not because of the epidemic, I guess that Hong Kong will not pass. To some extent, it has released a very important signal, that is:
Shenzhen will replace Hong Kong as an important business card for China in the next decade. Nansha will replace Shenzhen and become the technology and financial center of the next era.
History has been changed inadvertently. When will this turning point appear? My judgment is 2024. This year will change the fate of everyone in the world.
In addition to the Guangzhou Futures Exchange, another important signal is “Improving the Quality of Listed Companies.” This proposal is no less heavyweight than the National 9 Articles. You may not know the Nine Articles, but I will talk about the situation after the Nine Articles are released, and you will know what will happen in the future.
On January 31, 2004, the central government issued the “Several Opinions on Promoting the Reform, Opening, and Stable Development of the Capital Market” (referred to as the “National Nine Articles”). In 2004, the National Nine Articles initiated the share-trading reform. In the next three years, in line with the development of the international market, China started a vigorous bull market. From the lowest point of 998 points in 2005, the Shanghai Stock Exchange Index doubled six times to the highest point of 6124 points, until the US subprime mortgage in 2008 The outbreak of the crisis.
On May 9, 2014, the central government issued the “Several Opinions on Further Promoting the Healthy Development of Capital Markets” (referred to as the Nine Articles of the New Country). The reform of the registration system was proposed, which provided a direction for the development of the capital market. The stock market was quickly ignited, and the Shanghai Composite Index rose from the lowest point of 2000 to 5178 in a year.
The country is releasing an important signal that is the comprehensive reform of the financial capital market.
This signal will not be determined for too long, and it will be in the Fifth Plenary Session of the Central Committee a dozen days later. The big itineraries these days are basically arranged in Guangdong. On the one hand, the Guangdong-Hong Kong-Macao Greater Bay Area will represent the future of the country, on the other hand, it is also a comprehensive review of reform and opening up.
Why is the upcoming Fifth Plenary Session of the Central Committee so important? In fact, according to historical evolution, the Third Middle School is the most critical, and it is generally related to economic development. The development of the entire country is strongly related to the Three Middle Schools.
For example, in 1978, the policy of “two whats” was completely denied, and a line centered on economic construction was opened, leading to reform and opening up. In 1993, it was proposed to establish a socialist market economic system, which is to enable the market to play a fundamental role in the allocation of resources under national macro-control.
In 1998, it was proposed to improve the ownership structure, while actively developing the public economy, adopt flexible and effective policies and measures to encourage and guide the development of rural individual, private and other non-public economies. It started a vigorous wave of layoffs, which led to the outbreak of the market economy. In 2003, it was proposed to improve the market economy system, which brought a huge wave of wealth after China’s accession to the WTO. In 2013, it was proposed to comprehensively deepen reforms.
It can be said that the destiny of our entire country is inseparable from the three. At the end of this month, it will be the third middle + fifth middle school to complete the full upgrade iteration.
Every ten years, there will be a wave of wealth, catching it is catching it, and it can change the destiny of an entire generation. The goal seven years ago was mainly to deepen, and there was no historical policy. Played a role as a link between the previous and the next. However, we must know that historical economic policy reforms may be late but will never fail.
The policies to be announced at the end of this month may affect the direction of economic development in the next decade.
The directions that may be involved are as follows: One is to fully liberalize the birth policy. I have been emphasizing in my articles a long time ago that China’s demographic dividend will be the turning point in 2020 this year. The release of family planning at this time will provide a buffer period of at least 5 years for China’s explosive development in the future. The demographic dividend is the foundation of a country’s development and the cornerstone of social stability.
The other is the overall acceleration of the capital market. The stock market is a secondary currency market. In the Great Depression in 1973, the United States opened a historic bull market. The 45-year long bull market has become the world’s No. One power. Combined with the “new infrastructure”, the primary production and manufacturing industry will be transferred from the southeast coastal cities and provinces to the central and western regions, without the need to find factories in Southeast Asia, and directly complete the “internal cycle”.
Finally, it is an important symbol of becoming the world’s number one power and completing high-tech industrial innovation. For example, a series of policies such as blockchain, artificial intelligence, and Internet of Things related industrial policies, development directions, and taxation support.
In the final analysis, the three issues of demographic dividend, economic cycle, and technological innovation will be resolved from policy and direction at one time after ten days.
In the 20 years since joining the WTO, we have been following the United States, because this way we have the least resistance and we can accumulate strength and prepare for an outbreak. It’s different now. When two old people in the United States were still arguing, we started to prepare to overtake on a curve. From passive to active, this signal will be clear after ten days.
On the other hand, Grayscale Ethereum Trust became the second digital currency investment tool to report to the SEC. Basically established the status of Ethereum digital silver. In fact, in the previous article, I mentioned that the trend of Bitcoin and Ethereum depends on silver futures. The current situation is that silver has risen, but it is essentially an immeasurable increase, which drives the rise of Bitcoin and Ethereum.
After that, if silver does not appear to increase in volume, it will basically need to pull back to confirm the bottom. As for Bitcoin and Ethereum itself, I described it in an article a long time ago, looking at the price difference between the two.
Spread trading in the world is nothing more than three types: the first is the time difference, that is, the monthly or quarterly difference in futures or even the annual difference. The second is the price difference of the same product on two different exchanges, such as the Bitcoin arbitrage space between Binance and Coinbase. The third is the price difference between two highly correlated products. The ratio of gold to silver, ETH/BTC belongs to the third type: the price difference between two different products with high correlation.
The positive correlation between gold and silver is as high as 77%, and the positive correlation between Bitcoin and Ethereum even exceeds 80%. So you told me that because DeFi has driven the price of Ethereum to rise, it is actually just a disguised inflation. In the short term, it is only through a story to complete the washing of Ethereum chips, and then through the linkage between Ethereum and Bitcoin, it is just a process of swapping Bitcoin.
Just the day before yesterday, Xiao Feng, chairman of Wanxiang Group, made a statement. He believed that a complete blockchain economy still lacks one part, which is distributed commerce. Distributed network, distributed database, distributed computing, distributed storage, distributed ledger, distributed governance, distributed applications, plus distributed commerce, is a complete closed loop.
Distributed business is the distributed market that I have been emphasizing, the last holy grail of the blockchain world.
I won’t tell you, Mr. Xiao has been following my articles, and only a few months after I emphasized this concept did I understand what will happen in the future. (laugh)
Obviously, a low-level application system must have several conditions, that is, to provide developers or project parties with a low-level technical bottom-level, low-operation difficulty series of tools, and low-cost application development, deployment and distribution. environment of. But even so, Mr. Xiao still missed an important point: The underlying application system must have the important factor of “trusted position”.
The current breakthrough of the blockchain does not start from consumers, but from developers. The first project that can provide distributed market tools will be the first to go to the consumer side, because in essence, it solves the problem of project development in the blockchain world.
Yesterday MetaMask announced that it would aggregate DEX to generate MetaMask Swap. MetaMask is an Ethereum web wallet with millions of users. As mentioned in my previous article, wallet + transaction is the traffic portal for the entire blockchain world, and only projects with private domain traffic It is possible to bring a real outbreak.
History is advancing in the direction I predicted, because no one can fight the trend.
The simplest general-purpose tools are often the most difficult. For example, Ethereum’s ERC20 is a very simple but ever-changing tool. It is not important what project you want to issue, what is important is that you use it to issue coins. From this point of view, Ethereum is really like the ocean, giving birth to the early forms of life and the species evolution in the early stage of the blockchain world.
And the underlying application system level with it will form the continent of the blockchain world, completing the transition from ocean to land. A whole new species evolution was born in a new frontier.
At this time, the developer ecosystem will build smart contracts based on this underlying application system, and the rest is the interaction between merchants, users, and consumers. The value of the underlying system comes from the tools. The application is born based on the tool, and the ecology is generated based on the application itself, which will continue to multiply.
In the blockchain world, developers provide smart contracts developed based on different standards. The competition between these smart contracts will promote the continuous iteration of the market. Today users can use this smart contract, and tomorrow users can use another one. Smart contracts, the market is always iterating. Only through life and death can a better ecology evolve.
In each round of natural selection, a large amount of fuel will be sacrificed, and the old ecology will fall down to evolve a new ecology, and finally reach a stable state at a certain stage, until this delicate balance is broken again. So it will become a rapid iteration of habit in the blockchain world between enterprises, businesses and users.
There are no habitual barriers, only dynamic moats, and ultimately value will settle into the underlying system. This will be the norm for blockchain in the next few years.
Therefore, all Dapps in the blockchain world will exist in the form of small programs, continuously superimposed, and complete systematic evolution. The next round of outbreaks must wait for the completion of the underlying application system to produce a distributed market standard before the mainland ecology can be formed. The old ocean rules are still iterating, and a new continent is about to take shape.
The wind is blowing and the sky is about to change. Are you ready to welcome the new world?