During the recent sharp decline of encrypted digital currencies, I conducted a small questionnaire survey in the Bihu community to learn about Bitcoin users' transactions in the community during this period. It was found that more people increased their holdings of Bitcoin during this period among the respondents who answered the questionnaire. I think that for Bitcoin, a long-term steady increase in holdings is the best investment strategy. Of course, if there are good short-term trading operations, then the trading strategy is also feasible. But for the vast majority of investors, long-term purchase through fixed investment is the best holding strategy, in my opinion.
The current adjustment results from excessive speculation in the encrypted digital currency market and a large amount of leverage. The fundamentals of the development of the so-called encrypted digital currency market have not changed. As the absolute leader in encrypted digital currency, Bitcoin will continue to maintain its leading position in the entire encrypted digital currency industry. In the short term, Bitcoin is a virtual commodity, and the market demand for it is also in line with the general trend of demand for bulk commodities. Commodities are currently on the rise, so the rise in the price of Bitcoin is in line with the current general trend. In the current stage of adjustment, although the overall market has fallen sharply, some buying behaviors in the market are still pronounced. On the other hand, users on some other exchanges have seen a lot of selling. If we compare such a trend with recent buying and selling trends, we can see users' profitability in different regions from buying and selling Bitcoin. The buying and selling behavior of Bitcoin shows that holders have different views on Bitcoin. Most forces in the market still use Bitcoin as a trading product. This can be seen from the recent sharp drop in the market and the substantial use of leverage. But another user group adopts the strategy of buying and holding for a long time. For most investors, long-term holding of Bitcoin can get the most significant benefit of Bitcoin. My previous series of articles have explained this. A popular view now is to compare Bitcoin to digital gold. But I think Bitcoin is far superior to gold in all aspects. Another analogy is to compare Bitcoin to Amazon in the Internet era. But I think Bitcoin is also far superior to Amazon's stock. Bitcoin is a fully distributed, fair, globally accessible, and open currency network. Anyone can get bitcoin reasonably by participating in mining or buying and selling. The total number of bitcoins is only 21 million. Now anyone has the opportunity to obtain a portion of these totals. This is similar to that anyone can obtain Amazon stock during Amazon's development. If you hold it for a long time, you can get the benefits that Bitcoin can generate in the future. The total amount of Bitcoin is limited; that is, the supply is limited. When the market demand maintains a certain or even continuous growth, its unit price will continue to grow. This is determined by an essential supply and demand relationship in economics. Judging from the current development trend, the global acceptance of Bitcoin has multiplied. For example, on Monday (April 26), US time, two very influential pieces of news are that Chase Morgan began to provide Bitcoin fund services to its users, and the other is that a professional NFL athlete began to adopt Bitcoin to accept his Full salary payment. Beginning this week is the quarterly time for the announcement of the financial reports of listed companies in the United States this quarter. If more public companies announce that they are starting to hold Bitcoin, I wouldn't be surprised at all. In the long run, holding Bitcoin is one of the best response strategies under the current market background where a large number of US dollars are over-issued. The trend of over-issued US dollars will not stop in the foreseeable future, and the essential elements of Bitcoin's rise will continue to exist. For ordinary investors, holding Bitcoin to ensure that their assets are not devalued is the best response strategy.
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The price action of Ethereum in the past 72 hours has been very chaotic, although Ethereum avoided the massive loss of the callback and climbed to a new all-time high of $2644 before that. As of press time, after Bitcoin retreated to 50,000 U.S. dollars, Ethereum is still working hard to maintain an upward trend. How did Ethereum make up for its losses in the first place? Why does Ethereum reach a new all-time high price, especially when other cryptocurrencies, including Bitcoin, pull back? The answer may be that Ethereum is rising as an independent digital asset. Ethereum may take over Bitcoin and once again promote the upsurge of cryptocurrency. Think about it, the selling pressure in the past few days has been a pain point in the cryptocurrency market, and various indicators have shown bearish signals across the board. However, as far as Ethereum is concerned, this pressure has been eased, and the supply of Ethereum on exchanges also illustrates this point. tionAccording to data from Santiment, the supply of the Ethereum exchange has recently dropped to its lowest point in a year. This means that Ethereum is being transferred from the exchange and replaced by the holdings and other savings of long-term holders. The discovery supports the price outlook and long-term reputation of Ethereum. Since the second half of 2020, Ethereum's daily demand deposits have continued to decline, which also highlights that more and more people are now insisting on holding their Ethereum instead of transferring them to exchanges for sale or dumping. Here, it is worth noting that the recent price adjustments have promoted a gentle Ethereum price cycle because continuous appreciation may lead to increased risks. Previously, when Bitcoin fell below US$50,000, Ethereum fell to US$2,150. Still, its 30-day MVRV (MVRV is a relative indicator that the circulating market value ratio to the realized market value) remained strong within the overestimation range. This means that although the trading price of Ethereum is around $2500, it is possible to see more increases before the market adjusts. The MVRV of Ethereum is expected to fall before starting the devaluation of the U.S. dollar driven by Bitcoin and Biden. Therefore, once the market stabilizes, Ethereum will have more room for upside. But when might that be? This is a question without a definite answer. When writing this report, Bitcoin and Ethereum are still pulling back, and the price of Bitcoin is below $51,000. In the next few trading days, taking into account the continuous integration phase is essential for Ethereum to restart the rebound. If Bitcoin continues its dumping behavior, then the rise of Ethereum is likely to be delayed again. If the past 72 hours can be used as evidence, Ethereum is indeed following in the footsteps of Bitcoin. But will this connection end soon? It may have already started. According to Santiment, "The price of Ethereum has finally deviated from its correla with the price of Bitcoin. This is good news." tionAccording to data from Santiment, the supply of the Ethereum exchange has recently dropped to its lowest point in a year. This means that Ethereum is being transferred from the exchange and replaced by the holdings and other savings of long-term holders. The discovery supports the price outlook and long-term reputation of Ethereum.
Since the second half of 2020, Ethereum's daily demand deposits have continued to decline, which also highlights that more and more people are now insisting on holding their Ethereum instead of transferring them to exchanges for sale or dumping. Here, it is worth noting that the recent price adjustments have promoted a gentle Ethereum price cycle because continuous appreciation may lead to increased risks. Previously, when Bitcoin fell below US$50,000, Ethereum fell to US$2,150. Still, its 30-day MVRV (MVRV is a relative indicator that the circulating market value ratio to the realized market value) remained strong within the overestimation range. This means that although the trading price of Ethereum is around $2500, it is possible to see more increases before the market adjusts. The MVRV of Ethereum is expected to fall before starting the devaluation of the U.S. dollar driven by Bitcoin and Biden. Therefore, once the market stabilizes, Ethereum will have more room for upside. But when might that be? This is a question without a definite answer. When writing this report, Bitcoin and Ethereum are still pulling back, and the price of Bitcoin is below $51,000. In the next few trading days, taking into account the continuous integration phase is essential for Ethereum to restart the rebound. If Bitcoin continues its dumping behavior, then the rise of Ethereum is likely to be delayed again. If the past 72 hours can be used as evidence, Ethereum is indeed following in the footsteps of Bitcoin. But will this connection end soon? It may have already started. According to Santiment, "The price of Ethereum has finally deviated from its correla with the price of Bitcoin. This is good news." When many friends in the currency circle invest in Bitcoin, they don't know whether it is better to speculate or mine. Very tangled, very distressed, in fact, mining coins and speculating coins are two utterly different investment methods, and I am here to help everyone.
First of all, let's talk about currency speculation. It is a high-risk and high-yield investment method. Investing in currency speculation requires a large amount of capital. The threshold is too high. Most people who do not have this economic ability and anti-risk ability cannot play it. And we must always pay attention to policy guidance and pay attention to market trends. Now the currency price continues to fall. Some people say that it is better to buy coins to mine coins. It is not the case. Buying coins must bear the risk of falling currency prices. Risks and benefits coexist while buying coins to mine coins mean "driving and flooding to ensure income" and increasing value. As an investor, the long-term perspective is to look at the mining machine to produce coins; and the decision to buy coins when there is no rich market experience is only the choice of speculators! If you want to wait for Bitcoin to rise sharply before buying mining machines, you will face the problem of price increases and out-of-stock mining machines. Mining is a way to invest quantitatively in Bitcoin every day. One-time investment, long-term income, as long as your machine is running normally, a certain amount of coins will be generated every day, and the income will continue to flow. Given the energy-storing investment attribute of mining, it is not to sell coins every day, but mainly tuen coins, so there is no need to keep an eye on the market and pay attention to the current currency prices every day. Everyday life and work will not be affected, making money easier and more happy. When the price of the currency rises in the later stage, and a certain amount of currency is in your hand, you will have enough chips to trade for cash. However, you must pay attention to the cost of mining, whether it is an individual digging at home or a mining machine hosting company. Once the cost is too high, then our income will inevitably decrease. Although the market now does not look as good as imagined, there is a saying that says very well: "Opportunities are always for those who are prepared." We must be prepared for future. At the Boao Forum for Asia on April 18, China's former central bank governor Zhou Xiaochuan and current central bank deputy governor Li Bo expressed suitable cryptocurrencies. Li Bo said that encrypted assets should play a significant role in the future, either as an investment tool or as an alternative investment. Many countries, including China, are also studying it as an investment tool. Zhou Xiaochuan: As long as the money taken out of the digital wallet is a digital currency, you should not be too careful to distinguish whether it is account-based or token-based. I don't particularly care about the payment and settlement system behind it because ordinary people don't necessarily understand what the system behind it is like. You don't have to say is it decentralized or centralized. Of course, you may need to know one thing, that is, you cannot use this system to launder money, evade taxes, engage in drugs, and engage in weapons transactions. You cannot do gambling in China. This is the starting point of the digital renminbi. Moderator: Thank you! I want to ask Deputy Governor Li Bo, a few years ago, the People's Bank of China took some measures for transactions like digital currencies. Do you think the People's Bank of China will continue to maintain a strong stance on transactions like cryptocurrencies in the future?? Li Bo: We believe that Bitcoin and stable coins are encrypted assets. Encrypted assets are an investment option. It is not a currency in itself but an alternative investment. Therefore, we believe that encrypted assets should play a significant role in the future, either as an investment tool or as an alternative investment. If used as an investment tool, many countries, including China, are also studying the investment method's regulatory environment. Although this regulatory rule is the minimum regulatory rule, there are still regulatory rules. Also, to ensure that such assets speculate they will not cause serious financial risks, which must be done. In other words, before we figure out what regulatory rules are needed, we will continue to maintain the current measures and practices. The second point is that some stable coins are encrypted assets. If we want such encrypted assets to become a widely used payment solution, we need a stricter regulatory rule, which is more stringent than Bitcoin's current regulation. Because for a private company issued by a private company that will be used as a payment tool, stable coins must have regulatory rules like quasi-banks or banks to supervise the functions of such stablecoins. Therefore, in the future, if any stable currency hopes to become a widely used payment tool, it must be subject to strict supervision, just like banks or quasi-bank financial institutions are subject to strict supervision. Moderator: Governor Zhou, do you have anything to add? Zhou Xiaochuan: I agree with what I said just now. Everyone has to distinguish between digital assets and digital currencies. Digital currencies have three main characteristics, which Augustine Carstens mentioned earlier. I want to add one point. In considering these issues, China has a characteristic that we attach great importance to the real economy. Finance is to serve the real economy. Whether it is a digital currency or digital assets, it should be closely integrated with the real economy and serve the real economy. Because digital currency supports many payments, it is good for the real economy, and it must not rely on less. Without these payments, the actual economy cannot turn. So everyone has to ask, what are the benefits of digital assets to the real economy? I still have questions in my mind about this so that everyone will be more cautious. We have also gone through the global financial crisis in 2008. At that time, there were several phenomena: we were separated from the real economy, and some financial products would have problems. For example, at the time, shadow banking, some of the derivatives that everyone criticized at the time, became purely speculative transactions between several financial institutions and had no connection with the real economy. As a result, these products were prone to problems. Even the prominent leaders of many big banks, such as Citigroup or Bank of America, said that I couldn't understand the transactions of the personnel in their trading rooms, so it is difficult for me to control them internally. Therefore, for such a derivative, we are not saying that it will conclude now, but you have to be careful. Also, from the perspective of policy encouragement, this is the characteristic of China; that is, it emphasizes that financial products, financial services, and new institutions should pay attention to it. You have to serve the real economy, and you have to make it clear what your benefits are to the real economy. As the regulatory compliance of cryptocurrencies led by the United States has gradually become a system and the listing of Coinbase, Hong Kong's approval of a respectful exchange and Bitcoin fund purchase of Bitcoin by Meitu, Beijing's policy environment may be optimistic. Variety. This time, the central bank's deputy governor positively acknowledged the significance of Bitcoin and other encrypted assets as investment tools. He emphasized compliance and supervision, which is of great significance. The industry looks forward to positive changes in the future. great significance. The industry looks forward to positive changes in the future
The cryptocurrency industry is booming, with a total market value of nearly 2 trillion U.S. dollars, which is more significant than Amazon, Google, and Microsoft's market capitalization. Since March 8, Bitcoin's transaction volume has exceeded 50,000 U.S. dollars, with a market value of 1.12 trillion U.S. dollars, almost as much as silver in the world. |
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