On April 30, Bitcoin broke through the pressure in one fell swoop, and after reaching $9,000, it has been trading sideways between $9,000 and $10,000 for nearly 50 days.

In the past 10 years of Bitcoin, the cycle conversion between bull and bear is still obvious. The bull market in 2012-2013 then fell at the end of 2013, and the bull market in 2016-2017 finally fell at the end of 2017. If the same Time cycle calculation, 2020——

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Big environment can come once

2020 has been a very bullish year for Bitcoin by observers.

This year's global financial depression and the outbreak of the epidemic are bad for the financial market, but for Bitcoin itself, it is actually a good thing, although in the past three years, the actual positioning of Bitcoin has gradually changed from a payment against inflation However, the story of "Bitcoin 1.0", which itself uses a deflationary model to fight against an inflationary economy, is still deeply imprinted.

To put it bluntly, the U.S. dollar is a money printing machine, and all central bank currencies, including the renminbi and the euro, are economic models of inflation.

A very simple example. In 2010, the general price of milk tea was 3-4 yuan a cup. In 2020, the general market price of milk tea has soared to around 20 yuan. Even for cheap ones such as COCO and a little bit, the general price is 12 yuan. The range of -14 yuan, even if the growth of the milk tea industry itself is excluded, it means that in the past 10 years, the purchasing power of our currency has depreciated by at least half.

And Bitcoin’s deflation model (21 million Bitcoins, excluding the millions that have been lost, the actual estimated market circulation is around 16 million), in such a market, it will be a very attractive story, This is also similar to gold's rise in the first half of 2020.

Here's where gold is headed in 2020:

Here's where Bitcoin is headed in 2020:

In fact, in the past, there was often a view that the Bitcoin market was an independent market with little linkage with other markets. This sentence may be correct before 2017, but in the past two or three years, especially CME, BAKKT When some traditional industry exchanges include Bitcoin in the trading category, and the transaction volume continues to rise, Bitcoin is no longer an independent market.

This picture is a comparison chart of Bitcoin and the S&P 500 index in the past period of time. The red line is the K line of the S&P 500. The similarity between the two is very high.

In addition, I also observed a data that in the past week, the correlation coefficient between the price movements of Bitcoin and S&P 500 futures was as high as 0.91 (7 days)

So we can quickly conclude:

The trend of Bitcoin this year will be closely related to the global market and the general environment.

Then let's take three more recent news to see what the general environment of this year is:

1. Bloomberg News quoted people familiar with the matter as reporting that US President Trump is drafting an infrastructure proposal worth $1 trillion. The report said the initial version being prepared by the White House would use most of the money for traditional infrastructure projects such as roads and bridges, but a significant portion would also be set aside for 5G wireless infrastructure and rural broadband.

2. According to the latest data released by the World Health Organization on June 16, the number of confirmed cases of new crowns worldwide increased by 118,502 from the previous day to 7,941,791.

3. South Korea's Ministry of Unification confirmed that North Korea blasted the inter-Korean liaison office located in the Kaesong Industrial Park. Recently, due to dissatisfaction with anti-DPRK propaganda, North Korea decided to close the inter-Korean liaison office located in the Kaesong Industrial Park.

The first thing is the global release of water, the second thing is the intensification of the global epidemic, and the third thing is the spread of international conflicts.

Needless to say, the significance of the global release of water to the capital market, the entry of traditional funds has always been regarded as an inevitable process for Bitcoin to reach new heights. As one of the best-performing investment products in 2020, Bitcoin, Obtaining a certain favor from the funds after the release of water can largely alleviate the current situation of "mutual cuts in the market".

The epidemic and the international situation are bad for other assets and good for Bitcoin.

Many people don’t understand this point, and think that the slump of Bitcoin like 312 was caused by the epidemic, but in fact it was caused by loose liquidity (with the same funds withdrawn, the difficulty of funds is 10, the difficulty of A shares is 5, and the difficulty of bitcoin funds entering the market It may be 0.01), Bitcoin has been mentioned many times this year, as a "safe haven asset", although it once experienced a 312 over 50% plunge, but soon, Bitcoin recovered in 2 months All the declines since March 2020 have made many people in the capital market more optimistic about Bitcoin.

To put it bluntly, if the international situation is turbulent, some people need to buy bitcoins for hedging, even including some underground transactions.

The data can well prove this point:

In January 2020, conflicts occurred between the United States and Iran, and the Iranian fiat currency plummeted, followed by a high premium for Iranian Bitcoin. According to Localbitcoins data, the highest selling price of Bitcoin against Iranian rial was 970,363,750 IRR, which is about 23,100 U.S. dollars according to the public exchange rate, more than three times the normal price.

(It needs to be explained here that Iran officially stipulates that 42,000 Iranian yuan = 1 US dollar, but the actual convertible exchange rate of the public at that time was much higher than this figure, so it is not true that Iranian bitcoins have reached 3 times the price. But localbitcoins placed an order for 1BTC =1048200000 Iranian won, even according to the exchange rate that is actually available to the public, it is 7600-8000 US dollars, which does have a 5%-10% premium compared to other bitcoin markets)

For another example, Argentina once fell into an economic crisis. Correspondingly, the demand for Bitcoin in Argentina skyrocketed. In November 2019, the price of Bitcoin on an Argentine exchange was as high as $12,759, which was 38% higher than other exchanges in the world. In the same month, Argentina exchanged about 19.4 million pesos on LocalBitcoins.

Under such circumstances, the Argentine government has been forced to repeatedly introduce policy bills restricting Bitcoin transactions.

From a certain point of view, Bitcoin plays the role of the savior of the capital market. It is trying to save people who are on the verge of economic desperation due to wars, turmoil, epidemics, and financial crises. It extends an olive branch and sends it to the new world. From one point of view, Bitcoin acts as a troublemaker again. It hopes for turmoil and unrest, which will allow it to grow and nirvana again.

Some time ago, there was a quarrel between Bitcoin and gold on Twitter. Bitcoin analyst Willy Woo directly released a real-time chart. It is about 12.8 million US dollars (a luxury yacht), the gold income is 1.66 US dollars (a Snickers bar), and the bitcoin income is about 7.71 million times that of gold.

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The story of the blockchain industry is being told

If it is said that the general environment supports Bitcoin to have a chance to go bullish, then the development of this industry should be said to have a new round of opportunities.

In previous articles, observers said that the blockchain industry fell into a predicament with no stories to tell in 2018-2019. Public chains, Dapps, and STOs all failed. So where are the new stories? Many people are not aware of them. Arrived, but DeFi, NFT, and IPFS have all grown up quietly.

Let's look at some data:

According to DeFi Market Cap data, the total market value of decentralized finance (DeFi) tokens has exceeded the $2 billion mark and is now $2.206 billion. The total value of DeFi tokens has increased by 120% in the past two months, indicating that the The value of the industry is rapidly expanding.

According to DappReview's "2019 NFT Annual Report", the total market value of NFT has risen from US$180 million in 2018 to US$210 million in 2019, and is expected to grow to US$315 million in 2020.

Opensea, the leading NFT trading platform, has had a total transaction volume of 14 million US dollars since its establishment in January 2018, equivalent to about 70,000 eth. The platform mainly relies on a 2.5% handling fee for each transaction, and currently has a monthly income of more than 2 million US dollars.

Why do I say that DeFi and NFT are better than public chains and Dapps?

We know that when the public chain was in full swing in 2018, the concept was to put everything on the chain and use the public chain network to replace the Internet industry, but in fact there were only gimmicks at that time. These are numbers that are out of reach, and the so-called "WeChat on the blockchain" and "Weibo on the blockchain" turned out to be nothing more than a scam.

But DeFi and NFT are not gimmicks, but have really settled down and become applications. For example, decentralized lending has become the choice of a large number of miners. The encrypted art of NFT has also gained some attention in the traditional art field. NFT Not to mention the combination with the game.

The public chain itself is not bad. The difference is that there are no good applications on it. There was really no such thing in the past. We can’t see anything except a chain and a few white papers. The blockchain shows people a vast land, but What people see is that there is only yellow sand from the north wind on the land.

Now, we see the city.

So in essence, DeFi and NFT, including this year's IPFS (distributed storage), they will not be new stories, they will re-tell the story that we have talked about halfway, but it has not been completed.

What does that mean?

What does that mean?

For example, the iPhone, at first it only tells you that it is a communication device, a camera, a GPS positioning, and a text message tool. In the end, it shows all the blueprints in front of you. It is a reconstruction all your time.

The story of the public chain used to be told too quickly and too quickly. When there was nothing, it said it would replace the Internet, and it would only be laughed at.

And the current story, it is not a replacement, it is a subtle influence, it is to first make a stable currency (USDT), a decentralized lending (Dai), a game (Crypto Kitty), a streaming media (theta), and a A storage solution (ipfs), a chat software (Voice), and a financial system (Libra).

And after doing all of them, you will find that this is a new world.

Before the towering tree grows, it was also a seedling.

Therefore, in fact, we have seen many farsighted people, farsighted companies, and farsighted governments have raised blockchain and Bitcoin to a certain height.

Look at a few examples:

Man, Paul Tudor Jones, a Wall Street legend. He said that his bitcoin holdings accounted for just over 1%, maybe closer to 2%, and he also hinted that his Tudor BVI fund would participate in bitcoin futures trading.

For businesses, let’s not talk about Facebook, which has already been talked about, let’s talk about Nike. Nike has established a partnership with Plutus, a London-based financial technology startup, allowing users to receive up to 3% cryptocurrency rewards and 9% when purchasing items on Nike’s online store. Cash rewards (currently only in Europe), which is the phrase we are most familiar with - "Buy shoes and mine".

As for the government, on October 24 last year, after my country took the blockchain as an important breakthrough in independent innovation of core technologies, more and more policies have been introduced this year. Observers have seen more about the commercial implementation of blockchain, so they are familiar with this policy. Some, just to mention two, such as Guangzhou, this year allocated a budget of 780 million yuan to promote the development of blockchain technology and industrial innovation, and Hainan even more, spending 1 billion to plan a blockchain industry base.

Only a market with a story that can attract and trap people has a chance.

Tesla, for example, told a story about technology changing the world, and Alibaba, for example, told a story about the Internet financial system and trading system.

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It's Bitcoin's time to be bullish

In the trading logic of many traders, the bull-bear cycle judgment is the basis.

The bull-bear cycle of Bitcoin in the past is about 4 years. If this time is accurately believed, then 2020 will be the initial stage of the bull market, and the end of 2021 will enter the last carnival of the bull market.

But we know that the market is never a copy and paste of the past, we have to look at the actual situation.

As usual, paste the data:

Clarkmoody data shows that last night, the difficulty of Bitcoin mining was increased by +14.9%. The last time the difficulty adjustment was close to or greater than 15% has been dated back to January 25, 2018.

According to data from Weibo @Beatlenews, after the past two Bitcoin production cuts, the difficulty has been greatly increased, all of which are huge increases visible to the naked eye.

Is it a coincidence?

Observers don’t think so, there is logic behind every data, let’s analyze it, the increase in mining difficulty is essentially due to the intensified competition among miners. As the water season approaches, the cost of miners will decrease, and more and more miners think it is profitable, so more people will participate in sharing the cake.

But the cake is so big, and the output of bitcoins is fixed, so the difficulty must be increased to increase the cost of mining bitcoins, so as to reduce the competition of miners and squeeze out some small miners who follow suit.

And the increase in difficulty will bring about an increase in cost, which will eventually be passed on to the price of Bitcoin, just like when we eat a hot pot meal, the ingredients are the cost, the price of pork, beef and vegetables has increased, and of course the price of hot pot will also increase, and Bitcoin is the same , The mining fee is the cost of Bitcoin, the higher the cost, the higher the price.

This is an unbreakable cycle.

Miner data can support this view:

According to CryptoNews, in the past 12 weeks, miners still sold more bitcoins than they produced, but this trend has changed in the past few weeks. ByteTree data shows that in the past week, they mined 7,150 BTC and sold 5,821, keeping 1,329 BTC.

ByteTree CEO James Bennet said miners typically build inventories when the market is weak and then turn into strong sales. As prices recover, miners may start dumping inventory again.

In addition, the dynamics of Bitcoin whales also expressed their attitude towards the current price is still at a low level:

The Glassnode report pointed out that since January this year, the number of giant whale addresses holding at least 1,000 bitcoins has grown steadily, and currently reaches 1,882, a new high since September 2017. The current number of whale addresses is about the same as it was in March 2016.

Observers went to search for the trend of Bitcoin after March 2016. The place I circled in red in the picture below is the Bitcoin in March 2016. It fluctuated around $420 on Coinbase.

So we now know that at least in the trading market, miners and giant whales are not satisfied with the price of Bitcoin.

The next group is bitcoin quantitative funds and investment institutions.

Here, we look at CME, skew data shows that on June 20, the trading volume of CME BTC options will reach 2392 BTC. On April 20, the number was 910,000, a 25-fold increase in just two months. At present, the total open interest in the Bitcoin options market has exceeded 1.5 billion US dollars, most of which come from call options.

Compared with futures, options are more complicated and professional, and are generally considered the first choice of institutional investors by default. The expansion of the Bitcoin options market shows that professional institutions are entering the market.

Grayscale is also a topic that people in the blockchain industry have been talking about in the past 1-2 months. At first, many media said that "Grayscale will buy as much as the miners produce". To be reasonable, I have doubts about this point of view.

Later, Messari analyst Ryan Watkins wrote that due to the structure of the Grayscale Bitcoin Trust (GBTC), most customers use their own BTC to replace GBTC shares (Share), while the rest are cash deposits and actual purchases of BTC , so the trust actually purchased about 5,683 bitcoins from the market, accounting for 31% of the total of 18,250 new bitcoins mined after the halving.

This statement was once considered negative, but observers think it is a great positive. According to Grayscale’s own data, nearly 80% of the investors who buy GBTC are institutions, and the rest are basically pension accounts and family funds. And compliance investors, this means that 31% of bitcoins this year have been eaten by institutions.

The trading market can also testify to this view. Since March 13 this year, 1.775% of Bitcoin’s circulating supply has been transferred from mainstream exchanges, and the selling pressure on exchanges has also decreased by 12.39%.

Linked to the above, the number of giant whale addresses holding at least 1,000 bitcoins has steadily increased, and we can conclude that many institutions have gradually begun to become bitcoin giant whales.

In the past, a big resistance to the rise of Bitcoin was that early Bitcoin speculators and miners owned a large amount of Bitcoin. Once Bitcoin broke through and rose, it was likely to trigger the exit of early profit-seekers. Institutions will be the receivers.

People once exchanged 10,000 bitcoins for a piece of pizza, and now they sell you 100 million U.S. dollars, or even 1 billion U.S. dollars. This kind of thing is uncomfortable for everyone.

Therefore, the change of hands of giant whales is actually a disintegration of the threat to Bitcoin’s early currency holding addresses. For observers, I hope that all the giant whales at this moment are all giants of Wall Street, because their cost will not be much lower than ours. In order to benefit, they will drive Bitcoin to sky-high prices and sell them to latecomers investors in the field.

And we, like them, will get dividends.

In addition, there is another statistic that I think is quite important, but less media focus.

Since the first bitcoin ATM was launched in 2013, more than 8,000 machines have been installed in more than 75 countries, according to Norwegian financial services company AksjeBloggen.

The number of Bitcoin ATMs around the world has exploded by 150% over the past two years. In the first six months of this year, more than 1,713 Bitcoin ATMs were installed, the vast majority of which are in North America, which means that the installation rate of Bitcoin ATMs is actually rising rapidly.

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Why Are You Still Thinking In A Bear Market?

A trader whom observers admire said:

A big sign of a bull market is that you don't feel that the bull market has arrived at all, and you even want to short when it is rising.

The solidification of trading thinking is a problem that many people will face. What does it mean? For example, if I have made money on shorting Bitcoin, I will be more confident in shorting Bitcoin, and several times of success will make me more I have a firm concept of "Bitcoin is useless". Once there is a rise, I will only have the idea of ​​​​guessing the top and shorting.

Similarly, people who used to rely on hoarding coins to gain wealth appreciation will only rely more on hoarding coins. The more they fall, the more they buy.

Many people, including many successful traders, I have observed, have this characteristic of fixed thinking.

Unfortunately, the most active group of people in the blockchain circle basically entered the market in 2017. They have completely experienced the fall from the high point in 2017, and the desperate state of the bear market in 2018 and 2019. In the past three years, most of the money-making behaviors came from short selling, and because of this, many people have developed a solidified thinking.

In one group of observers, there is a trader. His point of view is: Looking at the past three years, shorting Bitcoin near $10,000 is almost always profitable (except for the small peak of $14,000 in 2019).

The bulls and bears in the bitcoin trading market are short and bears are long, which makes many people firmly believe in this view.

The last time I knew someone like this, he said: "Look at the past few years, as long as you shorted Bitcoin when it was $1,000, you were guaranteed to make money."

Since its birth in 2009, Bitcoin has been called dead tens of thousands of times by thousands of media. It has experienced more than 70% plunges more than 7 times, and it is still alive and well.

Since its birth in 2009, Bitcoin has been called dead tens of thousands of times by thousands of media. It has experienced more than 70% plunges more than 7 times, and it is still alive and well.

Of course, over the past few years, "bull market" has become a "cry wolf" story, but this time, the bull may actually come, what do you think-