As bitcoin prices return to $10,000, expectations for the bull market are getting stronger and stronger, and the industry seems to be getting busy again.
The community that has been in the bear market for a long time has been shaken up.
However, the topic they frequently discuss is not whoever gets the hundred times of coins, but when they buy the coins.
- Opinion | Bitcoin is enough, why do you need other coins?
- Babbitt column | "cottage coin" killed by a stick
- Taking history as a mirror, the altcoin season is coming again?
- How to understand the market cycle of cryptocurrency
Babbitt learned from a number of token investors' exchange groups and found that there are not a few to buy altcoins, and many of them entered the highs at the end of 2017 and early 2018. However, after May 2018, the market turned sharply. By the beginning of August, the overall market capitalization of digital assets fell from a high of 800 billion US dollars at the beginning of the year to less than 300 billion US dollars, a drop of nearly 60%. Bitcoin prices fell from nearly $20,000 at the beginning of the year to $8,000. The altcoin is generally subjected to a large-scale blood wash, and the industry is welcoming to a dark moment. At that time, Babbitt initiated a special planning topic – "The blockchain winter hit, persist or evacuate? " Objectively recorded the real status of the industry at that time.
(Figure 1, the market value of Bitcoin in early August 2018, image source: coinmarketcap)
Today, the first anniversary of the blockchain winter, the total market value of digital assets has risen to $300 billion. The price of bitcoin also rose from $8,000 in early August to $10,000. However, we did not feel a little warm, but it was even colder. Because compared with the beginning of August last year, the market value of Bitcoin has risen from 47% to 70%. In other words, the market value of the altcoins fell from 53% to 30%. The price of most altcoins still choose to continue to turn down, the median drop is actually more than 99%, and the investors who buy high positions basically "return to zero."
The bull market does not take money as money, and now it is full of zero coins.
Everyone is missing the days of the end of 2017 and early 2018.
At that time, bitcoin prices rose to nearly 20,000 US dollars, Ethereum prices rose to 1,500 US dollars, almost all ICO projects on the exchange compared to the crowdfunding price is 10 times the increase.
Everyone is excited, and the people holding a lot of ICO coins in their hands look at the increasing number of digits in the account before the decimal point, and their faces are filled with smiles every day.
People who didn't "get on the bus" were decisively involved in this unprecedented wealth feast after smashing their thighs, and madly "tutorial" blockchain knowledge. They race against time, race against time, even if they don't sleep at 3 in the morning, seriously listen to the "big brothers" in the community to point out the situation and analyze the current blockchain revolutionary situation.
Babbitt contacted an individual investor named Chen Xing (a pseudonym). He was the epitome of that period. When the bull market was the most insane, he took out 100,000 yuan of Stud and bought a certain altcoin, hoping to catch up with the Fortune Express.
"At that time, the bull market was very hot. Some friends were very optimistic. I bought BTC at OKEX and then converted it into XXX token." Chen Xing recalled to Babbitt the situation of buying the altcoin.
(Figure 2, Chen Xing bought a certain altcoin price trend in early 2018, data source: qkl12 3)
When Babbitt asked Chen Xing whether he would refer to the project white paper when he bought it, Chen Xing said, "The data of the project white paper will not be finished with reference standards.
"The founder of this coin is Yale University. I used to like to meet with v god. I said to a friend that when he was in Beijing, he said that his ppt can win the Nobel Prize."
Under the celebrity effect and the Nobel Prize, Chen Xing did not hesitate to buy at the top of the price.
Today, the price of this coin (0.0745 yuan / month) has fallen 99% compared to when Chen Star bought (21.22 yuan / piece), can still trade in OKEX, Bibox, but the 24-hour turnover is only about 100 dollars, The website could not be opened and the project was basically zero.
However, the unrelenting Chen Xing has not been sold so far, waiting for the solution, "there is not much money in cash, and there is no way to fool yourself."
If you want to solve the problem, the coin needs to rise 300 times from the current price, basically no hope.
Dusk of the altcoin
Today, bitcoin prices are basically stable at $10,000, which is a bit far from the historical high of nearly $20,000. Everyone has no doubt that Bitcoin will hit a new high after halving in 2020.
The altcoins are not so lucky.
According to the honey bee data, among the 4,519 currency records with the full highest and lowest price dates, the price of these tokens will generally go to “zero” after the record high (the price is more than 90% relative to the highest price).
Some "return to zero" can make a comeback. Some may never have a day to go.
(Figure 3, the price generally falls by more than 99% after each coin high.)
As shown in the above picture, if you buy in the above-mentioned 43 altcoins at the highest price in 2014-2015, you will basically go completely back to “zeroing”, even in the 2017 bull market. If you continue to die now, the decline is also above 99%.
At the end of 2017 and early 2018, the altcoins welcomed the carnival, and nearly 3,000 tokens hit the highest price in history. However, only about 500 tokens have since come out of new highs, accounting for only 17%.
The remaining 83%, the median drop so far has exceeded 97%, almost "return to zero."
(Note: The reason for using the median, not the average, the maximum/small decline is because some tokens are prone to abnormal fluctuations due to small transaction volume, and statistical results cannot objectively reflect the overall sample level)
In the past, in order to maintain the price of the currency, the methods commonly used by the project side included: the platform of the currency circle, the well-known VC investment, the academic big bull blessing, the community call…
In 2017, any of the above means can be used to make the price of the currency several times easier.
Nowadays, "the platform squad" is shouted by everyone, Algorand "opens the peak", and the investors are ridiculed as "two dog coins", many VCs complain that the leeks are getting harder to cut, the community is hard to call The price of the currency should fall.
According to statistics from the deadcoins website, which specializes in "death coins", there are currently 1,735 coins dead. According to the statistics of coinmarketcap, there are currently 2,432 tokens that are publicly traded on the exchange.
At the end of 2018, the above two figures were 934 and 2070 respectively.
Judging from this, the death rate of tokens has risen from 31% at the end of 2018 to the current 41%.
In the face of the current situation of the currency, in February of this year, Barry Silbert, CEO of Digital Money Group (DCG), denounced almost all ICOs for the purpose of making money. The tokens have no practical use, and they pointed out that the big ones Most digital tokens will eventually return to zero.
Unlike the "small fresh meat" Chen Xing, who is recommended by friends to buy coins, "old leeks" Bofan (a pseudonym) is more cautious, but the result is also "return to zero."
“When I went to a company, I met the CEO, CTO and other management staff. I talked well, the business model was good, the investment institutions were good, and then returned to zero after half a year.”
In fact, before this, Bo Fan has been fighting "returning to zero coins."
When he first stepped into the currency circle, Bo Fan was driven by a frenetic atmosphere. “Scientific” believes that the market will continue to be fanatical, at least to double himself. I was thinking about catching a quick flight, so I chose a coin that was hot at the time. As a result, the coin went to a small exchange that did not enter the stream. After the completion of the project, the project party ran away, and it was not long before it was removed from the exchange and officially returned to zero.
Since then, Bo Fan has encountered many unreliable teams.
"Some are pure scams, some are not developed at all, the team gave up, and the marketing pace was too fast after the launch, and the result was 2 months spent on fundraising, but did not cut the leeks in the secondary market, and then cool."
After investing in a number of “returning coins”, Bofan’s standard of living has become very low, and it has only slowed down this year.
Bofan later summed up the reason why his investment failed because he was too greedy, he did not have resources when he entered the circle, and he did not form an investment model suitable for the blockchain.
Painful thinking, Bo Fan decided to find a reliable team, can not just look at the heat. However, it does not seem to work when implemented.
“The team is really reliable, the results are not marketing, there is no traffic, and it is dead.”
This is not finished.
“I know that the team wants to market, the team really works hard to market, but the two months spent money on fundraising and died. There is also a good team marketing, there is also a fever, and the team is fighting inside…”
Bo Fan, who has repeatedly hit the wall, has long lost his temper and became the iron-headed leeks of the Buddhist system. He deeply understands that “returning to zero is inevitable, and getting rich is accidental”: in the future, more and more projects will die and return to zero. One or even one ten thousand can survive.
Is there still a day to come?
After the birth of Bitcoin, it has experienced many “zeroing”, but it still created a huge increase of 40 million times in 9 years.
Thus, "either returning to zero or getting rich" has become a powerful spiritual driving force to support the party.
In the face of the auspicious coins that are constantly "returning to zero", the group members cheered each other. "The bear market is stunned, you have no chance to be washed out."
In this group of people, as long as they have not been removed from the exchange, there is a chance.
Falling, they are seen as a good opportunity for investment.
"To the price of the heart, the spring does not plant millet, the autumn regrets." "The project party said in the dishwashing, hold!" "There is no return to zero mentality do not invest, no stop loss and chase execution, do not trade ""
At the end of the next episode, "I have a mentality of returning to zero."
Those who took a lot of the altcoin coins that were taken off the shelves did not succumb to the envy of other group members. "You still have the opportunity to return to this book. I have returned to zero directly and envy you."
So, can the abbots that are almost "return to zero" really turn over like those fearless investors think?
Babbitt's statistics from bees found that after the tokens were created at historical low prices, it is indeed possible to succeed in subsequent innovations. The median increase is even 40 million times (created by Bitcoin).
As shown in the above figure, we found that: 1) After the price of Bitcoin appeared in 2010, the general trend is rising, with a record increase of 40 million times. 2) There are more and more innovative tokens, from 1 in 2010 to 448 in 2019. This is related to the increasing number of tokens issued in recent years. 3) Although the number of innovative high tokens is increasing, the overall proportion is decreasing . This is related to the increasing circulation of tokens but the limited amount of funds. It is more and more difficult for token prices to keep rising for a long time. The situation of “issuance is the peak” will become more and more common, and the effect of making money by investors will become worse and worse. 4) The median price of the highest/lowest price of the token is decreasing year by year , from the initial 40 million times to 5 times the current year. This means that even if investors buy in the low position, the return rate will be lower and lower in the later period.
Not surprisingly, it is expected that the next time Bitcoin will be halved, the "Altseason" will be made, so that the probability of the "zero-coin" dog will rise to lower.
At present, the "zero-coin" that is dead and not stiff is still waiting to be removed from the exchange, apparently because it can bring benefits to the exchange.
As Ripple CEO Brad Garlinghouse said, the reason why most digital assets survived the 2018 plunging was because of the nature of speculators' "good gambling." Once market conditions change, investors will turn to more reliable and long-term well-documented assets, and more than 90% of projects will be defeated .
Therefore, we will see Bitcoin stand out from the crowd, and the altcoin coins are going to “return to zero”.
At the same time, investors need to pay attention to the fact that some exchanges disregard the long-term development quality of the project and the interests of investors. The behavior of the model currency and the currency currency without the bottom line is further exacerbating the “return to zero currency” in the hands of investors. The possibility of zero.