Editor's Note: This article comes fromTalking about Xia Kanshi (ID: huaxiakiss), Author: Hua Xia, published by Odaily with authorization.

Editor's Note: This article comes from

Talking about Xia Kanshi (ID: huaxiakiss)

, Author: Hua Xia, published by Odaily with authorization.

Recently, there is a consensus in the market: this round of market is the market of Bitcoin, and has nothing to do with altcoins. In the future, Bitcoin will continue to break through and rise, while altcoins will return to zero. That is, at such a time mark, people's confidence in Bitcoin has reached an unprecedented height.

One of the most important data indicators of this consensus is the "Bitcoin Market Value Proportion".

As of today, Bitcoin's market capitalization has reached an astonishing 68.58%. The intuitive data is that the market value of the entire encrypted asset is 298.2 billion US dollars, of which Bitcoin accounts for 204.5 billion US dollars.

Obviously, such a proportion requires us to conduct a more detailed analysis and a deeper understanding of this data.

To this end, we pulled out the historical graph of Bitcoin's market capitalization ratio, trying to discover some patterns and directions of change.

Taking history as a mirror, what laws can be referred to

It took me some time to make a data label for a chart, as follows:

I marked it with capital letters, followed by the market value of Bitcoin at the corresponding time. For the convenience of understanding, I also took the price of ETH at the corresponding moment. Finally got the following data:

Explain the reason for choosing ETH. It should be said that throughout 2017-2018, the market of altcoins benefited from the launch of ETH’s currency issuance function, and the altcoin projects based on ETH issuance and financing were finally reflected in the denial. The price change of ETH. The price change of ETH largely represents the overall market of altcoins at that time.

A: On February 20, 2017, accounting for 86.18%, the price of ETH was 12.77 USD;

B: On June 19, 2017, accounting for 39.07%, the price of ETH was 373.36 USD;

C: October 30, 2017, accounting for 59.37%, and the price of ETH is 305 USD;

D: December 4, 2017, accounting for 58.98%, and the price of ETH is 465 US dollars;

E: On January 8, 2018, accounting for 33.47%, the price of ETH was 1132 USD;

F: April 2, 2018, accounting for 45.18%, ETH price is 385 USD;

G: April 30, 2018, accounting for 36.46%, ETH price is 670 USD;

I: On March 25, 2019, accounting for 50.44%, the price of ETH was 133 US dollars.

Plotting the above data onto the original bitcoin market capitalization chart, after overlapping, we get the following chart:

In the figure, the black curve represents the change of Bitcoin's market value over time; the yellow curve represents the change of ETH price over time.

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Now, let's look for some regularities and characteristics:

1. Point A corresponds to February 20, 2017. At that time, the market value of Bitcoin accounted for an astonishing 86.18%. At the same time, the price of ETH was only 12.77 US dollars. At all time points, the lowest point of Bitcoin's market value ratio appears at point E, which corresponds to 33.47%. The corresponding price of ETH at this time is 1132 US dollars, which is the highest price at all time points marked.

Connecting point A to point E (as shown in the figure below), the market value of Bitcoin dropped from 86.18% to 33.47%. At the same time, the price of ETH soared from $12.77 to $1132. There is an obvious reverse running rule.

The time span is from February 20, 2017 to January 8, 2018. What happened in the middle?

First, during this period, the smart contract concept of Ethereum, as well as the coin-issuing projects and financing-funding projects based on Ethereum showed a blowout development, and the entire industry ushered in the most explosive mad cow stage. The newly launched altcoin project "several times of launch is basic, 10 times is very common, and 20 times is not uncommon." At the same time, some projects that survived 94 are also rising rapidly. This is the most glorious stage for altcoins.

2. Comparing the two curves, the interval between almost every point, the proportion of Bitcoin's market value and the trend of ETH price all show a clear negative correlation. That is, when the proportion of Bitcoin's market value increases, the price of ETH falls, and when the proportion of Bitcoin's market value decreases, the price of Ethereum rises.

Why is this so?

Some will say that this is a fact. Actually, there is a difference. It is a credible fact to illustrate with actual data.

3. The only exceptions are the two intervals from point H to point I, and from point I to the present. During these two periods, the proportion of Bitcoin's market value was slowly declining and rising, and the price of ETH and the proportion of Bitcoin's market value showed a relatively high degree of positive correlation.

Why is this so?

So far, the role of ETH as a benchmark for altcoins has become weaker and weaker, and it has finally become what we call a "mainstream currency". It is normal for mainstream currencies to fluctuate with Bitcoin, which explains the above specificity.

4. Point A-Point E is the stage with the largest and most violent increase in the last round of bull market. During this period, Bitcoin rose from $1,057 to a peak of $20,000, while ETH rose from $12.77 to $1,132.

The characteristic here is that Bitcoin took the lead in pulling its own market value ratio to a rare limit value, and then entered a big bull market, and the market value ratio began to decline sharply. In the last round, the proportion dropped from 86.18% to a historical low of 33.47%.

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What stage is it now?

We look at the data, and we can see that at point I in the figure, the market value of Bitcoin at this time accounts for 50.44%. At this time, the price of Bitcoin is 4031 US dollars, and the price of ETH is 133 US dollars, both of which are at relatively low prices in the stage .

Since then, the market value of Bitcoin has climbed all the way to the current 68.58%, and the price has risen from $4,031 to $11,450 today. As a mainstream currency, the price of ETH has risen from 133 US dollars to 210 US dollars. Compared with Bitcoin, the increase is absolutely weak.

Therefore, our conclusion is that the current market is in the stage of continuously pushing towards the limit value of Bitcoin's market value.

So, this time, will the limit value of Bitcoin reach that level?

I don't think so.

The reason is that at the stage of February 20, 2017, the number and volume of altcoins and mainstream coins at that time were far less than the current scale. At different scales, the limit value should also have corresponding differences.

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Then we are bound to ask, what will this limit be this time?

There is no guaranteed correct answer here, nor is there an absolutely scientific method. However, we try to use an important point to deduce, that is, Bitcoin's new high.

The high point of the last round of Bitcoin was around $20,000. So, we made such an assumption:

Assume that the price of Bitcoin reaches $20,000 again, and this price is reached in 2 months.

At that time, the market value of Bitcoin = 20000 * (17845437 + 60 * 1800) = 359 billion US dollars.

Remarks: 17845437 is the current circulation of Bitcoin, 60 days, 1800 is the current daily output of Bitcoin.

In addition, considering that the market value of Bitcoin has been rising in these two months, the overall non-Bitcoin market value will also increase to a certain extent. market value. On May 1, 2019, the market value of non-bitcoins was US$80.1 billion, and on June 30, 2019, the market value of non-bitcoins was US$129.1 billion.

Difference = 1291-801 = 49 billion US dollars.

Then, let's assume that in the next two months, the market value increment of non-bitcoins (altcoins) is also 49 billion. Then, the market capitalization of the entire cryptocurrency would be:

The total market value of cryptocurrencies = 359 billion + 92.2 billion + 49 billion = 500.2 billion US dollars.\5002=71.77%

Remarks: On August 13, 2019, the non-bitcoin market value was 92.2 billion US dollars.

Finally, we can get that when Bitcoin reaches $20,000 in the next two months, the market capitalization ratio of Bitcoin at that time is:

Bitcoin market value ratio = 3590

Therefore, 71.77% is the limit value of this round of Bitcoin's market value that we deduce through assumptions. The current level is 68.58%, and there is still 3.19% room for the limit value.

In addition, regarding the "bitcoin-only theory" that is prevalent in the market, I personally agree with half and oppose half.

The half that agrees is that in the long run, Bitcoin, as a value-storage and hedging asset, will continue to be strengthened and consolidated in the future, so, as a cross-cycle, only Bitcoin is right.

The half of the objection is that the market will always be an emotional market and a speculative market composed of a few rational people and a large number of irrational people. The nature of trading determines that hype and capital games will be eternal topics throughout the market. Therefore, even if everyone knows that Bitcoin is the best store of value and safe-haven asset, it will not be able to curb the collective speculation and hype around altcoins in the market at an appropriate time. Then, in a complete cycle, there will definitely be an outbreak of altcoins, and the strength will surpass Bitcoin, and at that time, it will be the best opportunity for everyone to earn more Bitcoins.

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