Editor's Note: This article comes fromBlockVC（ID：blockvcfund）, reprinted by Odaily with authorization.
Editor's Note: This article comes from
, reprinted by Odaily with authorization.
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Outlook for the global capital market in the post-epidemic era
In the context of global flooding and shrinking wallets of ordinary people, digital currencies appear to be calm. The only thing worthy of being "joked" is the "Twitter hacked" incident on July 16. Celebrities from all walks of life in the United States such as politicians Obama, Biden, and giants Bill Gates, Bezos, and Musk all had abnormal accounts. They tweeted that as long as they transfer Bitcoin to the provided address, they will get more Bitcoin returns. The price of Bitcoin in the secondary market was mediocre. This time, it "out of the circle" in a different way, which once again attracted people's attention. The popularity of Bitcoin in the world of hackers and the "dark net" has given it a sad background as "black gold". Once upon a time, people often compared Bitcoin with physical gold, calling it "digital gold", and believed that Bitcoin could do a lot in fighting inflation and hedging properties. However, after the "3.12" black swan incident and observing the performance of various assets released by global central banks in this round, this assertion seems to have been "falsified". Even though countries all over the world have resumption of work and production, interest rate hikes have curbed the further rise of gold prices, but under the double pressure of the continuous fermentation of the epidemic in the United States and the fear of inflation among ordinary investors, we are more inclined to see gold prices break through upwards in the future . Bitcoin is linked to the price of gold to some extent, can it also break the status quo of sideways trading and low volatility and then break through upwards?
Image source: Twitter
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Image source: Twitter
I thought that the main force would take advantage of the public opinion effect of the "Twitter Hacked" event, but even after more than ten days of Bitcoin sideways and low volatility, its market is still calm. Instead, a wave of 4% adjustments in the Shanghai Composite Index on July 15 caused the price of Bitcoin to drop by more than $100 (which has been considered a "considerable" fluctuation in the past two weeks). After 3.12, the digital currency market was linked with the peripheral capital market. Only around May, when Bitcoin production was reduced, it was temporarily decoupled from the fluctuation of peripheral assets. At other times, it fell into a vicious circle of "following the decline but not the rise". The digital currency market, which has always been known for its high volatility and quick style change, has become a bit dull under the attack of this round of external markets, which has caused the originally insufficient funds and flows to further flow out to the US stock and A-share markets.
Data source: OKEX
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Data source: OKEX
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Data source: BlockVC strategy research
Data source: BlockVC strategy research, coinmarketcap
Data source: TradingView
Let's take a look at the trend of Bitcoin's market capitalization in the past six months since February 2020. The benefits brought about by the halving of Bitcoin in May are still unable to turn the tide, bringing all investors the happy situation of "indices driving individual stocks", and its market value ratio touches the upper edge of the channel and continues to fall, handing over the "bull market" baton out. Ethereum is generally considered to be the leader of altcoins and the wind vane of altcoins' rise and fall. Its continuous strength also indicates that perhaps after 312, the investment style should shift to focus on exploring altcoin projects with their potential (long altcoins against Bitcoin Currency exchange rate) to earn alpha (alpha-beta) income.
Data source: TradingView
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Data source: TradingView
"Structural bull market" to "comprehensive bull market", what else can we do
At the beginning of July, the proportion of Bitcoin's market capitalization further fell below the channel, and the BVC market differentiation index b index showed us that the current market is a partial market, and the degree of differentiation has reached a recent high. Although the price performance of various small and medium market capitalization currencies is quite different, mining excess returns is not universal for ordinary investors, but we believe that this is still a path worth considering for players who are still trading on the market. In addition to finding altcoins with growth potential, topicality, and community popularity to participate in hype, it is also a good choice to use related derivatives of some active altcoins in the current market for arbitrage.
For those traders who have been waiting for an investment opportunity in Bitcoin or Ethereum, the best thing to do now is to wait. As of July 17, according to the big data of okex contracts, the open interest of Ethereum contracts has quietly reached the level around 312, and the transaction volume has increased in the past week. This means that the current market has once again come to a fork in the road, and no matter which side you choose, it is cost-effective for the main force of the contract. Although the recent several hour-level heavy-volume declines have failed to crush the market as a whole, which to a certain extent shows the strength of the market in this position, but the pressure level densely clouded above should not be underestimated. As the volatility of Bitcoin drops to freezing point, waiting for a "double dip" buying opportunity or a bright future after a breakout is a viable strategy.
