On the afternoon of December 19, the event “Looking for a bull market feast-Inbet China Tour Hangzhou Station” was held at the Grand Hyatt Hangzhou. This event was co-sponsored by Inbet and Golden Finance, Yibit, Ant Mine Pool, Pineapple Mine Co-organized by Ji, Renren Mine, Juan Technology, OKKONG, M Credit and Babbitt.
Wan Hui, the founding partner of Primitive Ventures, said in his speech that the current stage of the market is a well-known long cow from Western institutional investors. She divided institutional investors into three categories. One is speculative institutions, which focus on short-term returns, transaction-oriented, and liquidity is the king; the second is investment institutions, which focus on medium-term returns, which are trend-oriented, with legal currency standard returns; the third is allocation. Institutions, focusing on long-term returns, are oriented toward value storage, and the correlation between Bitcoin and other dollar-denominated assets will become increasingly lower.
She pointed out that after Bitcoin surpassed $20,000, the Bitcoin market must become increasingly institutionalized. With the entry of configuration-type institutions, the rise in the price of Bitcoin is unimaginable. Everyone must take good care of the coins in their hands, not sell to Grayscale, and do not make a band. Historical data shows that 95% of Bitcoin’s rise is completed in 5% of the trading day. It is difficult to seize the 5% rise. Spot does not need to be a swing.
The following is the record of Wan Hui’s speech:
Wan Hui: After the epidemic this year, I fled from San Francisco to the mainland. This is the first time that I have lived in China for so long and found that the entire domestic industry is very prosperous. Because I have always been there, I want to share with you some things I have seen abroad since 13 years. I have an overall feeling that most domestic industries, whether it is amber or the mining circle, are still relatively closed. No matter from the level of information, from the level of liquidity, from the level of price discovery, they are still in a state of internal circulation since 13 years. Now there is a very popular word “involved”, and information is also very involved.
Everyone is saying that a lot of domestic friends are actually completely out of such a market. Maybe the mining circle itself will feel the structural changes in the current mining market. I want to tell you that the admission of institutions has already happened in 2013.
So my speech this time is “a bright long cow from the West”. Why is it called Mingpai? From a compliance perspective, all financial reporting information must be open and transparent. Another name is that the wallet addresses of all institutions that store coins can be checked. Therefore, institutional cattle is a bright card .
This is a photo taken in January 2014. At the apex of the last bull market, when a Bitcoin reached more than one thousand dollars, NYC held a hearing at that time. The big brother sitting in the middle was a leader. Everyone Seeing the news that he will be the first in the world to go public, and he will be listed in compliance with the Nasdaq IPO. He is Fred Wilson. He is not only a big boss in Amber, but also a legendary predecessor in the entire American venture capital industry. Sitting next to him is the gray boss, none of the gray bosses are C.
Fred Wilson said during the hearing that we should invest in anything that China prohibits. Think about this logic. It may have been a watershed since around 2010. At that time, there was a very low-level investment logic in the US capital market: any victim of a game between great powers has a very large fundamental value. It’s like the Sino-US trade war. The United States wants to engage in Huawei precisely because Huawei has a huge industrial value. So he said such a sentence at the Bitcoin hearing, which is a very wise summary. Grayscale has been established in 2013, and it was the craziest time of the bull market in 2013. Because I and many friends around me were attracted to this incident in 2013.
The human nature of each cycle is the same. Human nature will not change. Every time everyone got on the bus because they were afraid of missing this bus. I remember very clearly that in the last three months of 2013, there was basically a 30% increase. Grayscale also entered the market at that time. It was actually an institution in the last bull market. In October 2013, Gray took the first investment. In January 2014, at the US hearing, in February 2014, the terminator of the last bull market collapsed.
This time, many friends may have heard vaguely from last year that the U.S. compliance agency Grayscale bought all Bitcoins. When we were still growing savagely, because the nature of Bitcoin itself is contrary to mainstream political ideas, in such a large ideological environment, we must grow savagely. I remember that from 2013 to 2014, Chinese miners were very strong, including the subsequent Bitcoin fork, and Chinese exchanges were also very strong. When we grow up brutally and feel complacent, in fact, the strength of foreign compliance or foreign institutions themselves are already doing a lot of layout.
One of his legs has landed, in the last bull market. We can take a look at the number of coins held by Grayscale Bitcoin Trust Fund. It was relatively stable before 2018, because the first two years were basically DCG founder Barry Sibert’s own coins, and Grayscale was a subsidiary of DCG. Barry Sibert told me before that the first thing to do is to avoid taxes for yourself. If you have a better understanding of U.S. taxation, U.S. Trust does not have to pay taxes. If I only sell Bitcoin as another asset, I have to pay very heavy taxes, such as capital gains tax, short-term capital gains tax, and long-term capital gains tax. It is equivalent to holding the currency for one year, and for more than one year, you still have to pay 20%, and there is no escape. What he thinks is very simple, this can avoid taxes and make 20% in vain. There will definitely be more and more long-term holdings in the future, and this kind of currency holders have the need for tax avoidance.
The real big watershed may be in 2018 and 2019, especially since last year, the gray scale has begun to grow explosively. If you want to get gray shares, you can buy them with cash. There is a very high bargaining price, and you can also buy them with Bitcoin. The Grayscale Bitcoin Trust Fund guarantees that one share can correspond to a certain number of real Bitcoins. Because the face value of GBTC shares has a very high premium, it has led to a lot of institutions depositing Bitcoin for arbitrage, and many domestic media are in It is said that Grayscale buys all its output every day. This purchase is not about buying cash in the market with US dollar bills, and the impact on the disk will not be so great. There are more than 70% of many institutions to deposit coins for arbitrage. This is a big concept.
What is an institution just said? I have divided the institutions into three categories.
The first category is speculative institutions. It is relatively short-term, transaction-oriented, and liquidity is king. Most of the institutions on Wall Street are like this. Like the ark, which has a relatively large transaction volume, they are all the more professional hedge funds on Wall Street. They will bring to the market. Comes with high liquidity. Whether they are doing term arbitrage or doing more professional quantitative trading, it is a speculative institution that eats volatility itself.
The second category is investment institutions . Investment institutions are many institutions that deposit coins in Grayscale, and they cannot be used for 6 months. From this perspective, it has a positive impact on the medium and long-term currency price. In addition, Grayscale now has no redemption mechanism, and the only thing left is to save paper bits, because what I get is the shares of the meeting. If I want to Ensure the Bitcoin position, and I will buy the Bitcoin again. This type of investment institution will have a better impact on the market in the medium and long term. But they are in legal currency. Their purpose is still to earn dollars themselves.
The last type of organization is the configuration organization. What is a configuration organization? It seems that everyone has recently heard that there is a company microstrategy. Basically all listed companies abroad, as well as domestic listed companies, large listed companies will have a very large capital pool, they have their own cash flow, and need to manage their own strategic reserves. Like Apple, as a company, it is really an enemy of wealth, because its cash position has exceeded that of developed countries in the world. Apple itself needs to do an investment preservation thing. Many listed companies abroad are now slowly adopting Bitcoin as an asset allocation. Many of them may have bought Treasury bonds or stocks of other companies or stock indexes. Now slowly there are many other listed companies, and now medium-sized listed companies are beginning to use Bitcoin as a table of asset allocation.
why? We have done a lot of correlation research. From now on, Bitcoin is the least relevant asset compared to other assets. As asset allocation, when there is great volatility, you can not go down and up at the same time. We found that when the real big dollar liquidity crisis came, even gold fell together. This is also a starting point for many long-term configuration agencies to allocate Bitcoin. The starting point is that the volatility of future assets is getting lower and lower, and the price correlation can have very low correlation with all other dollar-denominated assets.
Once this configuration mechanism comes in, I think it will have a very strong effect on the Bitcoin halving cycle. We have seen a lot of price volatility and trends, and we found that this time the lower limit of Bitcoin is rising higher and higher. I personally think that there will be no more than the retracement in the major cycle of the bull market structure, and basically every time there will be a retracement of more than 35%. After the allocation mechanism comes out, the probability of this level of withdrawal will become smaller and smaller. The exchange rate of other currencies to Bitcoin is getting weaker. The share of Bitcoin’s market value has also begun to rise steadily for a long time. When these allocation agencies come in, because their holding period becomes very long, an asset will undergo structural changes in its attributes.
This cycle may have started in 18 years. Whether our financial department or the supervisory department has made a very subjective decision, I think it should be the right decision. If it is based on their interests, I take the initiative to close the gate. All the liquidity will start to flow out, and our market will become a renminbi and it is a liquidity internal disk that is difficult to deposit and withdraw money.
We will now see that the current market is completely a futures market or a market dominated by non-spot markets. A lot of non-spot liquidity has been used to flow to large overseas futures exchanges such as BitMex. Everyone can still be regarded as an overseas exchange, after all, they are not subject to domestic supervision. There is also a third type of institutional configurable institution I just mentioned. They are playing an increasingly powerful role in this market. Seeing the currency holdings of all listed companies in the United States, there are Square, Paypal, All US dollar fiat currencies have unhindered deposits. In the future, Bitcoin as a configuration asset will be like a black hole, and fiat currencies can be issued unlimitedly. In our view, fiat currency is a long-term worthless thing. Fiat currency cannot maintain purchasing power itself. When these configuration institutions come in to hedge against legal currency risks, they will push this up line.
Many of their addresses on the chain are completely exposed. I just saw a piece of news. In the past three months, Bitcoin addresses that were less than a year old have purchased a total of 1.5 million Bitcoins. The emergence of such a fast address with a large number of positions has never appeared in the past. This is to explain from the chain why this is a bright bull market from the West.
This is also a very interesting data, a foreign organization made a comparison. They said that starting from September 4th in 2017, they will not do anything. They will go short when the Chinese wake up, and the Americans will go long when they wake up. Use all historical data to make a profit simulation and find that as long as you follow this kind of no Based on the brain’s strategy, the currency standard of return for the past three years is 800%. So everyone can see who bought the coins and what kind of different market sentiments are on both sides. Many things are brand names, and this is a completely brand name thing.
Let me talk about my personal feelings. After Bitcoin breaks 20,000, Bitcoin will definitely become more institutionalized in the future. This need not be questioned, because a lot of money in their own institutions is a very small proportion to them. Mining As far as I know, Fidelity in the United States started mining last year. At that time, I gave a lecture to a few friends in the domestic mining circle last year. At that time, they were still mining novices. All the production capacity of the machine shop has been covered. Directly smashed the big order under the US dollar, the money is a drop in the bucket for Fidelity.
Many things are because Bitcoin is too cheap now, why institutions can now come in and have such a big advantage? It is because Bitcoin is too cheap. The size of our assets is still too small, and it has to rise ten times to become gold The size of Bitcoin is now 1/3 of that of Alibaba. It’s just the market value of a stock at the midpoint of the US stock market. So I think that as more and more institutions come in, and more and more configuration-type institutions come in, I think the price increase is unimaginable. Everyone must take the coins in their hands and never sell them to Grayscale. Don’t think about what band you want. The band itself does not meet the probability. You can look at historical data, and 95% of Bitcoin’s rise was completed in 5% of trading days.
what does this mean? Just throw a non-standard, 95% of them may feel that you are selling right, but it is difficult for you to seize the 5% chance of rising, because 5% is a small probability event. Everyone can do hedging, and there is no need to perform band operations on your spot positions. Still have to believe in probability.
This time, there is another bull market that is completely bright. You can go to Google Index to search. When it is almost 20,000 this year, the yellow line is the price of Bitcoin, and the blue is the search volume. You can see that its search volume has not yet reached the end of 2019, which is not an order of magnitude from the time when it actually reached 20,000 U.S. dollars in 2018, so you may feel why it is quiet after this new high, because there is really no What happened to retail investors. Retail investors feel that they cannot afford it, and most of them have already sold it.
Finally, I want to say that everyone should be miners. A miner is a role in our ecosystem that is particularly suitable for being a coin holder. There are three body breakers and sword holders. Mining itself is an act of flat Bitcoin, especially in the bull market structure of Long Bull and Slow Bull, which is a relatively comfortable and safe way to earn coins. Everyone is still a lucky thing in the cycle, because I don’t think there will be a particularly crazy 30%, 40% market retracement. Everyone takes good care of the coins in their hands and be good holders.
