The 519 currency circle collectively experienced a large-scale one-day halving market that was more violent than 312, and the entire industry has also fallen into a state of uncertainty and panic. Due to the unclear policies and regulations that may lead to large-scale sell-offs of miners, irregular large-scale liquidation of mortgage lending, investor panic, and other factors, these factors jointly led to the occurrence of this incident.
On May 20, Cathie Wood, founder of the ARK Fund, believed that Bitcoin would rise to $500,000. Musk posted a diamond hand on his personal social media account, which means he is not afraid of volatility. It seems that the market has reached a watershed of opinions within a day. Game situations continue to occur, differences between long and short, and fundamentals fluctuate.But at this time, it is even more necessary to use first principles to judge the essential development route of the entire industry. The first principle is also one of the reasons why Elon Musk can reduce the cost of the SpaceX rocket dozens of times. This is a kind of ability and inspiration that can directly see the essential problems, and push forward or reverse to find the best solution.
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Fundamental level:
1. The attitude of policy supervision, from a local point of view, China is still in a very cautious period of comprehensive strategy to prevent systemic financial risks, so at this time, Chinas supervision is still in a conservative state of embracing the end of blockchain and tentative digital currency for digital currency and blockchain. This state may continue until DECP and foreign exchange can introduce a relatively controllable control method, and the transaction may not be fully opened. At the U.S. level, it is foreseeable that the SEC will increase the implementation of controllable supervision of digital currency, but also accept digital currency on a larger scale. Gary Gensler himself is also a digital currency expert, and has participated in the design and development of a top 50 public company. chain, so it is good news for the entire industry,Especially for the long-term development of compliance projects.
Therefore, from the essence of the first principle of the fundamentals, Under the general trend of technology application, major countries will eventually move towards the final result of vigorously supporting digital currency under relatively legal and compliant supervision, and major giants and companies will also adopt and accept digital currency payment methods on a large scale. This is an almost inevitable result, and the policy bits and pieces in the process of deriving from the inevitable result have created fluctuations and arbitrage space at the market level. However, domestic short-term regulatory policies, especially those at the mining farm level, are still unclear, and there is still a fundamental risk of being suddenly sold by miners, but it is a good thing in the long run.
So, from this point of view, I personally support the 1/2 inference of Cathie Wood.After seeing the essence, all that remains is to wait for time to prove.
2. Capital volume and ETF level, As of May 21, the total market value of the overall digital currency is only 1.74 trillion. If you exclude the halving of the past few days, the overall market value of X2 is less than 4 trillion. Compared to the US stock market alone, this is a very small market value, so in terms of capital volume, there is still a lot of money that has not entered the digital currency field, and most of the market value is still concentrated in Bitcoin ,At present, in the Alternative Investment ratio recommendations of major investment banks, the allocation ratio generally does not exceed 5%. From this point of view, it is true that the total market value still has a lot of room for growth, but it is different for the specific token or project to rise.
An important way to introduce more hot money is the specific time when the U.S. stock market will open the BTC ETF and whether China will open eft or other types of compliance direct trading models in the future. I personally think that this is also an inevitable final result, so from the long-term perspective of capital volume, more cash flow will inevitably enter the blockchain field.
3. Cognitive level, I believe that those who have done in-depth research have discovered the essential difference between this round of bull market and the previous round of bull market, which is the long-term thinking of institutions entering on a large scale. In 2017, most of the institutions that rushed in were the ones who made red-eyes for speculating and making money. Some domestic traditional well-known large institutions were cut off by the project for a round, but this round of bull market is very different.There are enough long-term perspective institutions to provide funds as a moat at the basic level, so this round of bull market personally believes that Bitcoin will be a long-term and slow bull market, but there may be a trend of sharp rise and fall in the speed of fomo speculation for different small currencies.
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Speculative level:
The degree of panic brought about by 519 is indeed greater than that of 94 and 312. Most of the market value was cut in half in one day, and contracts worth tens of billions of dollars were liquidated. It was indeed an unprecedented surprise attack. But there is also some reasonable logic here. For example, the large-scale DEX animal park has caused a lot of speculative funds in the secondary market to be transferred to DEX. The market value has been relatively inflated. Similar to how we build blocks, pulling out a few load-bearing blocks midway is naturally more likely to cause a temporary crash.
And this kind of crash also has an advantage, that is, it allows the chips to change hands quickly, makes low-level profit-seekers panic sell, and increases the average cost of new entrants, thereby further increasing the low price of the foundation at the basic level, so that in the follow-up market Get further price and value enhancement advantages in the trend.
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Brief summary:
1. Judging from the general situation and general trend from the perspective of fundamentals, the follow-up blockchain will always be in an upward trend, and this trend will continue for a longer period of time as the application technology is improved.
2. From the perspective of short-term supervision and policy fundamentals, the situation is not clear and not very clear, but the ultimate goal of the policies of various countries is still for the stability of the financial system and better development in the future. So these are also good things in the long run.
3. The attitude of mines at the short-term mining level will affect the sudden trend of short-term price comparisons, so I personally suggest not to use high-leverage mortgage leverage in the short-term for operations. After all, if you use 10 million, you still have 1 million if it falls by 90%. The number of coins has not changed. In the future, you may become 50 million with time. Hundreds of millions of assets were wiped out.
4. From the perspective of technical indicators, it has entered a predictable callback cycle. Whether it will further drop depends on the sentiment at the entire market level. For those who like arbitrage, they have entered a happiest volatility cycle. For long-term growth value lovers, it has entered a relatively difficult psychological game cycle, but I personally think that the problem is not big in the long run, please control the risk.
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Note: This article is only a personal analysis point of view, and does not provide any investment advice. Investors are advised to judge carefully to prevent financial risks.
