On the eve of Bitcoin breaking its all-time high, is your investment model profitable?


 233 total views

History will not simply repeat, but it is always surprisingly similar.

There are several very interesting phenomena in our circle, if you list them, you will find it really strange.

such as:

1. Almost everyone knows that 9 out of 10 play contracts are the ending of liquidation to zero. However, contract players are always in an endless stream, and the transaction volume in the contract market is far more than the spot;

2. Almost everyone knows that BTC will fall before the halving, and will rise a few months after the halving, so now BTC has risen, and then many people are short from 9,000 to 18,000, and even more short from 9,000. To 18000;

3. Almost everyone knows that BTC can make money. Buying BTC is almost never set up. In history, the number of days when BTC exceeds 18,000 is only three days. As long as you did not buy it in those three days, you should all be resolved now, but everyone just doesn’t. buy;

So I am going to ask you a heart-wrenching question, how many BTC do you have? In other words, what percentage of your position is BTC?

At the moment when BTC is about to break through its historical highs, let’s take BTC out and say that it does not constitute investment advice, but we hope to give you some useful information or thinking.

01 The legendary cycle theory

The halving is just like the sentence at the beginning of the preamble-“History is not simply repeated, but it is always surprisingly similar.”

If you look back at the several major financial crises in the past 100 years, you will feel that this sentence is too appropriate. Financial crises always come back after a certain period of time. It seems surprisingly similar, but you can analyze it specifically, such as The Tulip Crisis in 1637, the South China Sea Bubble in 1720, the U.S. stock market crash in 1929, the Asian financial crisis in 1997, and the most familiar subprime mortgage crisis in 2008, each triggered a completely different cause. These crises are not just simple repetitions.

If you look at BTC’s halving cycle theory every four years, you can almost apply this template. The surprisingly similar part is: every time the halving is over, the price will start to rise, then break through the previous high, then hit a new high, and then crash. , Continue to wait for the next halving…

However, the difference is that the boosting power of each boom and fall is actually different.

In the 13th year (after the 12-year halving), the debt turmoil in Cyprus triggered a crisis of trust in traditional financial institutions. In the second half of 2013, some European countries introduced favorable policies for BTC, the first batch of sensitive investments. Those who are aware of this huge investment opportunity, most of China’s earliest “elderly”, miners and first evangelists were born in that era.

The subsequent plunge was normal. After all, it has risen 88 times in the whole year in 2013. If it rises too much, it will always fall. Following the “Notice on Preventing BTC Risks” issued by the five central ministries and commissions in December 2013, BTC will continue to see 83 Within days, it plummeted by 92.5%.

It can be said that the boosting power of this halving is mainly due to the fact that BTC has appeared in the eyes of the world for the first time, jumping out of the earliest geek circles, the first wave of geeks and investors with keen sense of smell. It’s a booster this time.

At that time in 2017 (after the halving in 2016), the underlying technology of BTC: the strong rise of blockchain technology, the outbreak of Ethereum and Western Europe, and the WannaCry virus caused BTC to become extremely hot, and it took the world’s attention for a period of time. , BTC’s increase of 24 times a year and ETH’s 100-fold increase have made the entire circle, or the blockchain world, boil.

Then after the hustle and bustle, a place with chicken feathers, and the following things, I believe that most of you who read this article have experienced it, and they are often unforgettable…

The boosting power of this halving is related to the entry of blockchain technology into the eyes of the world, the raging WannaCry virus, the massive issuance of USDT, and the crazy pursuit of mainstream people. Overall, this round of bull market is a bull market for retail investors. , I vaguely remember the process of BTC climbing from two to three thousand US dollars to 20,000 US dollars. Except for a special event in the middle, it was a big accident. The rest of the time, most groups in the circle are very lively, everyone is beaming, and even many others. Irrelevant WeChat groups, BTC are also appearing more and more in group chats, people are constantly attracted, CX, brainwashed, and then enter the circle…

But what many people don’t know is that many of the elderly and old miners who came from 13-17 years have already cashed out after the small climax of the WannaCry virus raging in May-June 2017. They feel that the rise is enough. It’s scary. I didn’t expect this wave of retail investors to buy, buy and buy in the next half year.

Then the time came to 2020, the days after the third halving…

02 History is similar again, and again different

Halving According to the cycle theory, 2020 is just the eve of the bull market, and the real bull market should be in 2021.

However, in the days that the eve of the end of the year is about to pass, BTC has approached the previous high of 20,000 US dollars. It seems that sooner or later, the breakthrough seems to be a matter of time. The only thing that makes people look forward to is how many times BTC will increase in this bull market?

If you open the K-line, you will find that BTC’s increase in recent months is a bit similar to the end of 2016. It seems to be preparing for the bull market next year. However, this year, or the increase of the year, is the same as the previous one. There are totally different boosting factors.

The most intuitive feeling is the atmosphere in each group. In a commonly seen sentence, it is “Eight eighteen thousand, each group is still lifeless, and there are no red envelopes.” This is the same as the last one. The lively scenes of various groups of people are completely different. The reason is simple. Last time many people were in the car, but this time, there were very few people in the car. “One coin, one tender model” these slogans can be seen dozens of times every day, and never seen again.

It is said that this round of the bull market in the circle will be de-retailed and gradually beautified. As a result, this is only the eve of the bull market, and it seems that the situation has become like this.

A familiar big V reluctantly posted: “This is the first time in history that BTC is at this price, and the market is still discussing whether it is a bull market.”

It’s said that mainstream coins are leveraged BTC, and altcoins are leveraged mainstream coins. However, every time BTC goes bullish, we will raise an old-fashioned question. You “choose carefully and think carefully” positions. , Or after all kinds of “sell high, buy low, one pass is as fierce as a tiger” operation, has it outperformed the full position of BTC holding it?

If you take the 312 event as an important time node, BTC rose from 3800 to 18000, a full 4.7 times increase. You can think about it, has your assets doubled by 4.7 times since March 12?

It’s really soul torture…

03 Boosting factors for this round

The legendary institution cattle, KOL and rich, CCTV, DeFi…

1. Institution-Grayscale

Grayscale can be said to be the biggest driver of this bull market, not one of them.

In terms of the accumulation speed, Grayscale’s speed of buying goods in the recent period is much higher than the speed of newly mined BTC miners. In other words, it is currently a market where supply is less than demand, and it is no surprise that BTC is rising steadily.

And more importantly, you have to know how the gray scale fund works. There are a few points to pay special attention to:

Most of the people who buy BTC through Grayscale are institutional investors, accounting for about 60-80%;

Grayscale BTC has a long-term premium, because Grayscale actually earns management fees. This premium can be regarded as a price for compliance and peace of mind. The arbitrage mechanism generated by the premium is actually one of the reasons why Grayscale buys a large number of BTC, but the reason is relatively complicated, and I will not discuss it in this article;

The BTC you bought through Grayscale is actually just a GBTC (BTC purchase certificate). This GBTC cannot be redeemed for BTC (at least not currently), and you must wait 6 months before you can sell it. This certificate has been transferred.

This third point is the most important, sharp-eyed you must have discovered something-does this mean that grayscale can only enter and cannot exit? Have BTC locked up in disguise?

That’s right, this is the truth… and the transfer of GBTC through US stocks has turned the selling pressure on the US stock market instead of the market in our circle.

2.KOL and the rich

The most well-known recently is the Twitter posted by “Er Ya” (a well-known character in Game of Thrones).

The post of halving has received thousands of reposts and thousands of replies within a few hours, and various groups on WeChat have spread virally. Tesla CEO Musk, DCG founder Barry ·Hilbert, Justin Sun and other big V players inside and outside the circle participated in the commentary interaction.

Ricardo Salinas Pliego, the third richest person in Mexico and the founder of retail giant Grupo Salinas, also tweeted to recommend the BTC-related book “The Bitcoin Standard” to netizens, and said that BTC can protect citizens’ property from government confiscation. 10% of current assets are invested in BTC.

These KOL and wealthy posts may not be the boost of the bull market, but a bull market phenomenon.


You may not have noticed that since this year, 170,000 BTCs have entered the Ethereum DeFi ecosystem through WBTC, RENBTC, etc. This number was only two to three thousand in April and May this year. In just half a year, the number of BTC entering DeFi has increased dozens of times.

Most of the BTCs that enter the DeFi ecosystem have participated in the DeFi fields such as borrowing and liquidity mining. In fact, from another perspective, it is a bit similar to the gray-scale Gbtc, and these BTCs are “locked up” in disguise.

04 Potential future risks

You may ask, is there no risk in buying BTC now? I don’t think so.

1. In the short term

The BTC Greed Index reached a peak of 94 (extremely greedy) last week, which is only one point away from the last historical high of 95. The last time 95 was BTC14000 in 2019, and the next day after the 95 index, there was a waterfall.

This greed index, if you look at the playback of the past 2 years, is always accurate. Buy when the greed index is the lowest, that is, when everyone is most panicked (such as 312), and then the greed index is high, and sell when everyone is most excited, which can almost ensure substantial profits. Perhaps this index reflects what Buffett often said-I fear others’ greed, and I am greedy when others fear.

However, even if we quantify the index of greed and fear, it still seems useless. The law of 28 is the eternal truth. There are only a handful of players who can use this index to guide their investment in imitating Buffett’s philosophy.

Of course, what’s strange this time is that although the index is already extremely greedy, you don’t seem to feel the extreme greedy emotion of people around you…

2. In the medium term

The amount of funds required for BTC to increase several times each time is also increasing exponentially. BTC is already a behemoth with a market value of more than 300 billion US dollars. It is not at the same level as the volume at the beginning of 2013 and the beginning of 2017. If you want to keep going up, naturally you need more money than the previous two times.

Where does this money come from? If the last cycle was driven by retail investors, this bull market was driven by institutions, the next bull market, and the next bull market, who should drive it? Country?

This is also the opinion of many insiders that this may be the last “crazy bull” or “big bull” of BTC. In the future, the volatility rate of BTC after the US stockization and de-retailization will gradually decrease, becoming similar stocks and funds. Such conventional investment products. The 4-year halving cycle may be greatly lengthened, or it may no longer exist.

3. In the long run

BTC still has a problem that has not been solved. This is also one of the important reasons for the fork of BCH and BSV. After decades, when the block reward is close to zero or even disappears completely, what BTC will use to generate enough chains How about uploading TX (transaction records) to feed miners? After all, the security of BTC is actually guarded by them.

At present, the payment attributes are almost stripped from BTC. Whether it is LTC, BCH, USDT, DAI, ETH, etc., there are payment attributes and payment scenarios that are much stronger than BTC. BTC said in the white paper from Satoshi Nakamoto The road from “electronic cash system” to “electronic gold” is gone forever.

And you have to know that the stored value function of electronic gold cannot generate a few TXs on the chain, because no one will transfer the gold, and the BTC that enters the ETH DEFI ecology can not perform various operations on ETH. TX on the chain that generates BTC, it can be said that the more BTC enters ETH, the more TX of the original BTC chain is weakened.

BTC’s Lightning Network? Smart contract based on BTC? At least for now, we don’t see the slightest possibility of their success.

Of course, you might say, what’s the hurry? These are all things that need to be considered after a few decades, and the ship will naturally straighten to the bridgehead. At that time, cryptocurrency will not know what it will develop into, and it is too early to worry about it now. How can the capital consider such a long-term thing? You think people will not buy BTC because BTC may not be safe after a hundred years? !

So, this is just a “century worry” of BTC. What is certain is that at least this bull market, or even the next few times, this problem may not constitute a reason to hinder people from buying BTC. After all, a hundred years later Whether you can see that it’s a problem, why bother “underground worry”?