Author | Qin Xiaofeng
Even if it continues to refresh historical records, Bitcoin is still gaining momentum, getting closer and closer to $30,000.
According to OKEx market data, since the beginning of the year, the cumulative increase of BTC has reached 275%; starting from the “312” of 3,800 US dollars, the highest increase of BTC is close to 650%; according to the current trend, BTC will continue to record positive growth this month, and will hit a record by then The longest monthly consecutive rise period since 2019.
With the rise of BTC, ETH, which is the “king of the public chain”, is not to be outdone. It has successively broken through its previous highs, reaching a maximum of more than US$740. The cumulative increase this year has reached 450%.
After calculating, many investors found that they kept swapping positions and tossed for a year, and the accumulated income has not yet been higher than the net income of holding BTC and ETH.
However, the performance of other cryptocurrencies was mediocre. Although there are occasional new coins (GRT, 1inch, etc.) that show good income potential, the overall altcoin sector has not shown much improvement.
Does the high sideways BTC continue to climb, or turn around and start a callback? Will the much-anticipated “cottage season” come? What new ways will there be in the crypto market next year?
1. Market review: Is 20,000 USD the starting point for BTC?
Two months ago, the BTC price was 13220 USDT. Odaily Planet Daily conducted a survey to predict the highest price of BTC in the next year.
At that time, most participants were optimistic about next year, but it is generally believed that this year may only reach about 15,000 US dollars.
However, to everyone’s surprise, BTC has risen so rapidly, rising in a straight line with a slope of almost 45°. It has more than doubled in the past two months, and the maximum correction during the period does not exceed 15%.
On November 5, BTC broke through $15,000, setting a new record since June 2019; on November 25, BTC hit a historic high ($19,800) for the first time but ended in failure. Since then, it has been consolidating near $18,000 to $19,000. Day; On December 16, BTC hit the historical high again and successfully stood above the 20,000 USD mark, setting a new historical record.
After setting a record high in 2017, BTC plummeted by more than 30% in the following week. Therefore, many investors predict that BTC will begin to pull back and choose to increase positions and short positions.
But this time, BTC did not repeat its history, and its gains remained unabated: 22000, 24000, 26000, 28000…One by one, the barriers were captured one after another, eventually reaching 28415 USDT, setting a new historical record.
According to OKEx market data, since the beginning of the year, the cumulative increase of BTC has reached 275%; starting from the “312” of 3800 USD, the highest increase of BTC is close to 650%.
Moreover, according to the current trend, BTC will continue to record positive growth this month, and it will set the longest monthly continuous rise cycle since 2019-three consecutive months of rising.
The rise of BTC has also led to the growth of ETH. The price of ETH continues to break historical records, setting a new high ($740) since May 21, 2018. In the past two months, the price of ETH has risen from US$380 to US$740, which is nearly doubled; since the beginning of the year, ETH has risen 450% this year.
In terms of futures, data from Bybit showed that the BTC contract holdings (USD) of the entire network exchanges continued to soar, reaching 9.342 billion US dollars as of today; the holdings of Ethereum futures hit a record high of 2.21 billion US dollars today.
However, under the volatility of the market, it is not only shorts who have suffered heavy losses. In fact, the long and short sides of the high pole have become the fuel to accelerate the rise. Coin data shows that in the past 24 hours, the contract market has liquidated a total of US$562 million on the entire network, and the number of liquidated positions is 53,520; in the past 30 days, the contract market has liquidated a total of 7.34 billion US dollars on the entire network, and the ratio of long-short liquidation is 1.24.
Due to the recent fluctuations in the market, Odaily Planet Daily reminds investors to stay rational and use high leverage with caution.
The rise of BTC has also led to a surge in blockchain concept stocks. In the past two months, Ouke Cloud Chain (01499.HK) under Ouke Group rose from HKD 0.12 to HKD 0.25, an increase of more than 108%; Huobi Technology (01611.HK) rose from HKD 3.18 to HKD 5.27, an increase of 65 %; In terms of US stocks, Canaan (NASDAQ: CAN) once rose from US$2.01 to US$6.37, the largest increase of 216%, and the current increase is still about double.
After working hard for a year, does your investment income outperform BTC, ETH or blockchain concept stocks?
2. Cause: Institutional leadership, retail entrance
Why has BTC continued to soar in the past two months? A number of interviewees told Odaily Planet Daily that it was mainly driven by the entry of institutional users such as Grayscale.
“The role of mainstream Wall Street institutions such as Grayscale has not diminished, but they have seized and accelerated the bull market after this wave of halving. It is because of their drive that international mainstream capital has accelerated the recognition of blockchain and encryption. Currency. Don’t underestimate the gray scale. Their buying volume is amazing. They have bought more than 50,000 btc every month for 2 months, and their buying continues.” Huobi global business strategy director Li Zhe said.
William, the principal researcher of OKEx Research, also expressed the same view. “The direct reason is the entry of high net worth and institutional investors. Since the second half of this year, institutions such as the American insurance giant MassMutual Life Insurance Company and the business analysis company MicroStrategy have bought Bitcoin; and online payment giants PayPal, Singapore’s largest commercial bank, DBS Bank, has also announced that it will launch cryptocurrency payment services. According to Bitcoin Treasuries data, more than 6.9 billion US dollars of bitcoin are currently held by listed companies. This has brought prosperity to the bitcoin market.”
William explained that the underlying reason why institutional users choose to invest in Bitcoin is the change in the global macroeconomic situation this year.
On the one hand, due to the impact of the epidemic, the recovery of the global economy will slow down in the coming year; on the other hand, the central bank’s extremely loose monetary policy has pushed up inflation expectations in the financial market. In an economic environment of high inflation and low growth, in order to avoid the loss of nominal principal and the need to pursue higher returns, investors’ demand for hoarding cash has naturally evolved into demand for gold and Bitcoin.
In an interview with Bloomberg in September this year, the CEO of MicroStrategy said: “The average annual inflation rate in the future will reach 20%, which will greatly reduce purchasing power. The risk of holding Bitcoin is less than holding cash. At present, Bitcoin is The only asset that allows us to get positive returns.”
It is precisely under the impetus of institutions that the price of Bitcoin continues to soar. And, after breaking through 20,000 US dollars, it attracted more retail investors’ attention and entry.
“When the price of Bitcoin exceeded the $20,000 mark, a large number of investors began to flood the cryptocurrency market, causing some cryptocurrency exchanges to experience stagnation or downtime. This indicates that the main investment force in the market may undergo structural changes. , From institutional investors to small and medium investors.” William gave his judgment.
“BTC’s recent continuous rise has fully demonstrated that global fomo sentiment has risen. Both institutional investors and retail investors have begun to enter the market frantically, with continuous capital injection.” Li Zhe told Odaily Planet Daily that it has been in the recent past. Evangelize Bitcoin to friends in traditional finance.
In the past two months, from a domestic perspective, Bitcoin frequently appeared on Weibo hot searches, and many of my friends outside the circle began to pay attention to and invest in BTC. From abroad, retail investors’ interest in Bitcoin has also risen. The search volume of “Bitcoin price” in the search engine Google hit an 18-month high.
In addition, OKEx data shows that USDT prices and OTC premiums have continued to increase in the past two months, which also reflects that more funds have begun to enter the market.
“After breaking through the previous high of US$20,000, BTC has received unprecedented attention from the market, and it has established everyone’s confidence in the big bull market. The driving force for the rise comes from the extreme imbalance of supply and demand, and the rapid growth of new funds entering the market. Holders are reluctant to sell.” BlockArk founder Su Ye explained.
3. Future trend: Although the cottage season is late, but is it here?
Currently, BTC is trading sideways at a high level near 27,000 USD. How will it change next? There are still three days before the end of 2020, can BTC break through the 30,000 USD mark? When will the highly anticipated copycat season come?
(1) BTC cannot rise to the sky
Regarding the long-term value of Bitcoin, Li Zhe believes that its ceiling is the total market value of global gold (more than $8 trillion). At present, the total market value of the crypto industry is only 720 billion US dollars. In the long run, it is not a big problem for Bitcoin to exceed 5 trillion US dollars.
“Whether it will exceed 30,000 U.S. dollars by the end of 2020 will have little impact on Amber’s old miners and the coin hoarding party. Next year, I expect it to be between 50,000-100,000 U.S. dollars,”
“Bitcoin’s rapid rise after breaking through 20,000 U.S. dollars is unprepared. I think there is a chance to touch 30,000 U.S. dollars this year, and it will not be difficult for the highest price to reach 100,000 U.S. dollars next year.” Su Ye also remains optimistic about next year’s prices. .
However, William also raised concerns about future trends. He believes that this round of Bitcoin bull market is a product of high inflation expectations. For institutional investors, what they care about is profit, not feelings like “Bitcoin faith” or “Blockchain revolution.” “After the vaccine is on the market and the epidemic is gradually alleviated, with the gradual recovery of the economy, monetary policy will gradually change from loose to moderately tight. At that time, institutional investors may sell Bitcoin. Until then, Bitcoin will continue to Maintain the main upward trend. Of course, as the price of Bitcoin gets higher and higher, market volatility will gradually increase. Investors are not recommended to increase leverage.”
In addition, from a short-term perspective, the possibility of BTC’s correction is greater.
Recently, Grayscale Cryptocurrency Trust Fund temporarily suspended its opening to new investors. JPMorgan Chase analysts said that the sharp slowdown in GBTC inflows may increase the possibility of Bitcoin price corrections.
“I feel that Bitcoin is very close to its peak, although it may further rise to $30,000. Bitcoin will definitely see a correction, but the magnitude is small, or 10%-15%.” Vijay, head of business development at Luno, a Singapore-based cryptocurrency exchange Ayyar is also not optimistic about the short-term market.
(2) ETH is expected to reach an all-time high in 2021
With the development of DeFi this year and the launch of ETH2.0 as scheduled, Ethereum has achieved good development this year. Since the beginning of the year, ETH has grown 450% this year.
Moreover, with the successful registration of Grayscale Ethereum Trust with the SEC, more institutional users began to invest in ETH. The data shows that in the past 30 days, Grayscale has accumulated 277,324 ETH, and this number is still growing.
In addition, next year, the Chicago Mercantile Exchange (CME) will launch Ethereum futures contracts, which will further benefit ETH.
All in all, next year’s ETH price is expected to continue to rise, breaking the historical high of $1,400.
“ETH/USD: It has been 2 months since this chart was created (as shown in the picture). I am very optimistic about the trend of ETH in 2021. It is expected that ETH will break through the historical high next year… With the current macro trend, I think There is no reason to be bearish.” Crypto trader Cactus tweeted that he is still optimistic about the medium-term prospects of Ethereum.
(3) Can the cottage season come?
The recent rise in BTC is more often than not, with blood-sucking market often appearing.
CoinMarketCap data shows that in the past two months, the share of BTC’s market value has risen from 58.97% to 69.19%, an increase of 10.22%, and there is a further upward trend. In other words, the growth of other cryptocurrencies is far less than that of BTC, and the highly anticipated “cottage season” seems out of reach.
However, Nicholas Merten, a cryptocurrency strategist, is full of confidence in the “cottage season.” He stated that Bitcoin has over-expanded, and as investors shift their profits to leading altcoins, we may see a shift in liquidity and the altcoin season is coming.
Su Ye believes that Bitcoin’s rise will continue for a while, but the copycat season will soon come.
“From May to July 2017, Bitcoin experienced a two-month wide swing. QTUM was first launched 20 times, EOS rose 6 times a week, and the copycat bull market started in May. .Before the end of spring next year at the latest, the copycat bull market will start from the new currency and the sub-new currency. The GRT we invested in before has increased by 20 times a week, which is a strong evidence that funds are extremely eager for the new currency.” Su Ye explained .
He added that mainstream currencies should be the top priority of investment, because the main positions of institutional cattle are mainstream. “The most promising ones are ETH, LTC, BCH, and ETC with the largest grayscale positions. In addition to mainstream currencies, DeFi will definitely continue to be the protagonist of the big bull market next year.”
Li Zhe is also optimistic about the future of DeFi. “In 2021, we are optimistic about ETH, DOT, KSM, UNI, SUSHI, AAVE, YFI. The general trend of DeFi is unstoppable and will inevitably drive ETH. Of course, some leading DeFi leaders may also perform well because of their true value support.”
4. What is the new gameplay next year?
This year, we witnessed multiple ways of playing in DeFi. From liquidity mining to algorithmic stablecoins, each new gameplay will drive market sentiment.
Next year, what new ways will the crypto market produce?
Li Zhe is more optimistic about the combinability of DeFi to generate new gameplay, as well as the slot auctions of Polkadot and KSM. “Next year I look forward to seeing some new DeFi agreements, forming some new Lego combinations, and spelling out some new gameplay, such as the algorithmic stable currency of the recent fire, and the DeFi derivatives track or insurance project that still has no fire, and more Lightning loan products that are convenient for retail investors. Another big game is the slot auction of Polkadot and KSM. There are many opportunities in this, and it is worth digging deeper.”
Su Ye is more looking forward to the twin combination of Polkadot’s parallel chain and DeFi. “We see that this year’s DeFi mainly releases the liquidity of ETH (accounting for 11% of the entire cryptocurrency market value). Polkadot’s cross-chain interoperability and DeFi’s interoperability will truly bring about an encrypted world where funds flow freely. With new varieties, it seems that the algorithmic stablecoins led by FRAX, BAC, and ESD are gaining momentum, and there may be a big opportunity for the next YFI level.”
