Editor's Note: This article comes fromCybtc Blockchain (ID: cybtc_com), reprinted by Odaily with authorization.
Editor's Note: This article comes from
Cybtc Blockchain (ID: cybtc_com)
Cybtc Blockchain (ID: cybtc_com)
, reprinted by Odaily with authorization.
In the last half month, after Bitcoin broke through 40,000, there has been a wave of corrections, the market sentiment has become impetuous, bad news continues, and even rumors are everywhere. As an old leek who has been in the ups and downs of the currency circle for many years, I would like to talk about my humble opinion.
We all know that when looking at the trend of a currency, we should look at the trading volume and capital flow preferences in the short term, the supply and demand relationship, monetary policy and other fundamentals in the medium term, and the core value in the long term. In the short term, the recent situation is that funds prefer Ethereum and other mainstream currencies. In addition, at the end of the year, there are more cash outflows, and Bitcoin is temporarily left out. This is a fact. In the long run, the surge in the past ten years has fully proved the core value of Bitcoin. Its unique natural advantages in value storage are incomparable to any other traditional assets, and it is not an exaggeration to describe it as digital gold.
So today I want to focus on the medium-term benefits, which is today’s theme, and talk about the new features of Bitcoin at this stage from the five fundamentals. It is these new features that together constitute the development of Bitcoin in the next few years. The fundamentals have also become the strong cornerstone for the continuation of brilliance and new highs in 2021.
The first cow, the growing institutional bull.
Over the past year or so, mainstream investment institutions led by Grayscale have significantly increased their holdings of Bitcoin, and institutional investors have continued to buy a large number of Bitcoin through Grayscale Trust, which constitutes the main tone of the bull market from 2020 to the present. Grayscale Trust continues to buy Bitcoin, and Grayscale’s trust design prevents it from forming selling pressure on the BTC spot market. Its position planning is more inclined to long-term holding, which is equivalent to a disguised lockup, injecting a strong upside for Bitcoin Momentum, building a solid bottom for the market, pushing Bitcoin to new highs one after another. 2020 is just the first year of Bitcoin institutional cattle, and Grayscale Trust enjoys exclusive dividends. As more and more institutions begin to join this battle, 2021 may become the year when institutional bulls explode.
The second bull is the periodic halving bull every four years.
From the perspective of supply, Bitcoin completed the third block reward halving in May last year, and through the analysis of the long-term trend of the 10-year cycle from 2010 to 2020, we can find a basic law that every round of halving events will Catalyzing the next round of bull market, no matter what the internal logical connection between the two is, its potential role in boosting the bull market cannot be underestimated.
The third bull is a retail bull with unprecedented enthusiasm.
In November 2020, the American payment giant PayPal announced that all account holders in the United States will be able to purchase cryptocurrencies including Bitcoin through its platform. "A new era. As the price of Bitcoin has risen sharply in recent months and exposure has increased, retail investors are also scrambling to enter the market, adding tens of thousands of valid wallet addresses every day, hitting record highs repeatedly.
The fourth bull is the liquidity squeeze brought about by the whales.
The amount of Bitcoin stored on exchanges is gradually decreasing, while the number of BTC whales is increasing. As of January 11, the number of Bitcoin "whale entities" (wallet addresses with a position of more than 1,000 BTC) rose to a new high of 2,140. The number of whales has been shown to be highly positively correlated with cryptocurrency prices.
Statistician Willy Woo also said that the recent market buying of Bitcoin is driven by long-term holders. The market will be bullish when more assets move from active traders to long-term holders.
With the large-scale buying of giant whales and the entry of institutional investors, the liquidity crunch of Bitcoin will become increasingly severe, which will directly affect the supply and demand relationship in the Bitcoin market, thereby driving the price of Bitcoin to continue to rise.
