The bullish investment logic of the cottage currency: Why should we choose "digital gold" and "coin ring Moutai"?

If we believe that there will be a big bull market next, then we should hold two kinds of assets: one is bitcoin, and the other is mainstream platform coins like HT and BNB. If you are a risk-seeking investor who wants to fight, you can buy some altcoins.

Is it a bull market now?

Some people say yes. Bitcoin rose from 3,000 US dollars to nearly 14,000 US dollars, only 6,000 US dollars from the highest point of 20,000 US dollars in 2017; platform HT rose from around 0.9 US dollars at the beginning of the year to 5.2 US dollars, and the market value rushed into the top 10 of Coinmarketcap, which is obviously A prelude to the arrival of the big bull market.

Some people say no. As bitcoin has risen all the way, the exchange rate of many mainstream currencies against bitcoin has been falling. "Bitcoin has not been halved, and the bitcoin in my hand has been halved."

There is also a large group of people still in the bear market. They are the holders of the altcoin. Although the bitcoin has skyrocketed, the market value of the altcoin in their hands has shrunk so much that the total value of the assets is one less than zero. Even more desperate is that they have not seen the hope of rising assets until now. "It has fallen from tens of thousands to a few thousand. In the end, it will probably go to zero. But I don't want to throw it."

This is the current currency.

Does the altcoin have investment value?

At the beginning of 2019, the wealth effect of the Ioan project reactivated the leeks that were put to death in the bear market, and the subsequent model currency introduced a lot of fresh blood to the currency circle. At that time, everyone seemed to feel that the altcoin is gradually recovering.

But this is an illusion.

The IEO allowed some retail investors to earn money, and the project parties and exchanges tasted the sweetness. Driven by the interests, there are more and more IEO projects on the exchange, and the quality is getting more and more complicated. However, the number of currency investors who have only recently recovered from the bear market is limited, and obviously cannot meet so many fundraising needs. The market was quickly defeated and the IEO wealth myth was shattered. As for the model currency that has been used for a while, after the investors in the market are gradually familiar with the routine, the time for making money of the model currency is getting shorter and shorter, and the possibility of investment loss is also increasing.

The altcoin only caused a commotion, and then began to bleed. On the contrary, Bitcoin has soared from 3,000 US dollars to a maximum of 14,000 US dollars, which has made many altcoins investors scream.

Should I copy the altcoin or continue to buy "expensive" bitcoins? This is a problem. But we can focus on three interesting phenomena:

1. The number of altcoins is increasing, but the total market capitalization of Bitcoin in the cryptocurrency market has risen to 70%, which is higher than the proportion of the bitcoin big bear market at the end of 2018. From this point of view, basically all the exchange rates of the altcoin against bitcoin are falling, and even can be said to be a plunge.

2. Although each of the altcoins has its own differences, the idea of ​​buying them by retail investors is almost the same, that is, speculating to make money. Investors who have almost no altcoin will think that their own investment in the altcoin is stored value, and no one feels that they bought the altcoin for transmission to future generations (except those who shouted). If a altcoin has no money-making effect, it will soon be abandoned by most holders.

However, although many retail investors buy Bitcoin for short-term profit, there are not a few people who use Bitcoin as a value storage tool. This means that the Bitcoin community naturally has a group of loyal Holders who choose to hold Bitcoin for a long time. People who invest in Bitcoin are more peaceful than those who invest in altcoin.

3, a altcoin can only get a consensus in a certain local market, and this consensus is likely to die out with the launch of new projects, but Bitcoin can almost gain the consensus of the entire cryptocurrency market.

Although every altcoin is claiming that they are unique, there are too many altcoins, and the concept on the market is too small. The same concept often corresponds to multiple altcoins. Because most investors in the market have limited time and lack of expertise, they can't really identify which projects are better, so it is difficult to focus on a single project. Then, there is fierce competition between these altcoins, and they continue to divide the users in the market. There are more users of a certain altcoin, and there are fewer users of another altcoin. Therefore, the consensus of the altcoin market is always fragmented and easily replaced by new projects. (If a cryptocurrency gains a consensus in a local market in the short-term under the combined effect of capital, media, and community, then in the future, this consensus can be replaced by next-generation capital, media, and community-packaged projects.)

Bitcoin has the strongest consensus in the industry, and can even be said to be a global consensus. This global consensus goes beyond the cryptocurrency industry and extends to the financial community as well as governments in certain countries. In addition, Bitcoin continues to harvest the consensus of the altcoin crowd. In 2017, many leeks entered the circle because of Ethereum; in 2018, many leeks entered the circle because of EOS. But after a round of bulls and bears, most of these speculators have been converted into bitcoin holders, because bitcoin is the most resilient encryption asset in the bear market. From the historical point of view, the consensus of Bitcoin is not only difficult to be replaced by a certain altcoin, it is still absorbing and strengthening consensus from the altcoin.

4. One of the most rude expressions: Bitcoin is limited, and the altcoin is unlimited. There are only 21 million bitcoins, but the altcoin is infinitely.

Although many altcoins claim to be limited, however, because different altcoin projects are competing to share the same market consensus, it can be considered that the altcoin is unlimited. A certain altcoin can only control the token production of this project, but it cannot control the token production of other project parties; in the speculative market, the difference between the altcoin and the altcoin is not large, so the launch of the emerging project side In fact, it is diluting the price of the original project side. For example, there are already project side HashGraph, IOTA, ByteBall, Conflux, etc. in the DAG concept, but this does not prevent the launch of the emerging DAG concept project, and the users who are interested in the DAG concept.

However, in addition to the forked coins like BCH and BSV, few projects will claim to have launched a "better bitcoin". ZCash, Monroe, Grin, and Beam attempt to improve e-cash from a privacy perspective, and to some extent can be seen as a competing product for Bitcoin. But what happened to them? The price of BCH and BSV has already explained everything, and they have failed in the market competition. Although they each have a strong community, they have not achieved a global consensus. On the contrary, the consensus has increasingly converge on a few hardcore elements, and many people have been sucked away by bitcoin. The privacy coin is the same as the DAG concept. It is already a special track. The launch of the new project is divided into the consensus of the privacy currency track, not the consensus on Bitcoin.

For these four reasons, whether we should invest in altcoin or bitcoin, the conclusion is clear at a glance.

Of course, I am not a Bitcoin extremist. I don't think there should be bitcoin in the end. Other public chains should die out. If so, the world of cryptocurrence is too boring. But at least when we invest in cryptocurrencies, we need to hold a certain amount of bitcoin in our hands, so that we can feel at ease.

An alien class: platform currency

The platform currency is a heterogeneous in the bitcoin independent market.

Although the exchange rate of most of the altcoins and even mainstream currencies against bitcoin is plummeting, the exchange rate of platform coins against bitcoin has risen all the way. From the beginning of 2019 to the present, the platform currency represented by HT, BNB and OKB has risen rapidly. HT has risen from around 0.9 US dollars at the beginning of the year to around 5.2 US dollars, which is nearly 6 times. BNB has risen from around 5 US dollars to a maximum of 40 US dollars. Near the $0.5 level, it rose to around $4, far more than the BTC.

04

why?

For convenience, let's take the example of HT of the fire coin – the market value of this currency has recently entered the top ten of Coinmarketcap's market value, which is arguably one of the most representative currencies in the platform.

One of the reasons for the rise in platform currency prices: the exchange earned money

HT's biggest buy is the fire coin itself. At the beginning of HT's launch, Firecoin announced that Firecoin Pro will use 20% of its profits every quarter to repurchase HT in the circulation market. So the most direct reason for the rise in the price of platform coins like HT is that the exchange earns money.

First, the transaction fee. In the big bear market, the cryptocurrency market either has no volatility or is plummeting. As a result, the trading interest of retail investors is naturally not high, and the transaction fees that the exchange can charge are less. If we consider that the digital currency exchange is charging fees in the form of digital currency, and the price of the currency is falling, the income situation will be even more bleak.

In the bull market, the first is that the trading situation has become more active, and the second is that the price of the currency has risen. If the price of bitcoin rises three times, then the transaction fee charged by the exchange has increased by at least five times.

Followed by the cost of the currency. Bitcoin in the big bear market is still bloody, and the tragic nature of the altcoin is not to be said. The entire market does not make money, and it will plummet on the market. So, which project party is willing to pay a high amount of the foreign currency fee to the exchange? At the same time, the bear market is already bleak, and the exchange is not willing to go to too many projects to suck blood. Therefore, this huge income has plummeted.

When the market began to recover, the situation reversed. If the project party can earn money, they will be willing to pay the exchange an unacceptable currency fee in the bear market. At the beginning of 2018, the currency fee for a project on the line was tens of millions of yuan. According to the value of the carbon chain, the current cost of the three major exchanges is returning to this volume.

The second reason for the rise in platform currency price: locks and buys brought by IEO

IEO made an indelible contribution to the rise in platform currency prices.

Users want to participate in IEO, they must lock the platform currency, and it is not locked for one or two days, it is locked for one month or more. This reduces the amount of platform currency in the market.

At the same time, users use platform coins to purchase IEO projects, which increases the use of platform coins (somehow replaces the original Ethereum), and expands the purchase of platform coins, thereby increasing the price of coins. .

The third reason for the rise in platform currency price: more destruction and lockout

In addition to using fixed income to repurchase platform coins, exchanges are still looking for "more reasons" for destroying and locking positions. The practice of fire coins is the epitome of many exchanges.

At the time of the Staking boom in Ethereum, PolkaDot, Cosmos and other star projects, the RM locks the mining function of the HT lock bin, which is divided into 7 days, 30 days, 60 days, 90 days and other lock cycles, and the minimum number of locks. It is 100HT. Locked warehouse users can get HPT airdrops every day, which is “HT lock bin mining”.

In addition, the fire currency also introduced the HT deduction fee: starting from July 21, the Firecoin Global Station began to fully implement the ladder fee rate, and supported the HT deduction fee. The more users hold the HT, the procedures they enjoy. The higher the discount, the maximum deductible 3.5% of the handling fee.

On June 22, 2019, Fire Coin announced the launch of Huobi Token's upgrade plan: "Fire Coin Global Points" upgraded to "Fire Coin Global Eco-Certificate". Token, the ecological partner of all eco-investments of the Coin Eco-investment, can be an HT-based eco-certificate. At that time, users who hold HT can enjoy the benefits of the Firecoin Eco-pass. In addition, HT is still integrated with the ecological scenes such as Firecoin Cloud and Huobi Club, and the payment scenarios of mining machines and community service providers. In the future, along with the fire currency pool, the fire currency public chain, the fire currency information, the fire currency capital , the fire coin ecological fund, fire letter, fire coin wallet and other business development.

In short, as long as it can be realized, the exchanges are definitely doing their best to expand the application scenarios of platform coins, increasing the possibility of platform currency locks and destruction. What is the result of this? We can look at the data: According to the fire currency announcement, in the first quarter of 2019, the fire coin repurchased and destroyed 6,474,800 HT; in the second quarter, the HT of the repurchase and destruction of the fire coin reached 140.17 million; At the end of the third quarter, the fire coin repurchased and destroyed 33,538,300 HT. In the first three quarters of 2019, it destroyed a total of 13.96% of HT. These include 3 quarterly destructions, 9 FastTrack and Prime Lite destruction.

The above is the rising logic of the platform currency price. In a sense, the platform currency is like the "Mauzhou Maotai" in the currency circle. Since the landing of the A-share market at the issue price of 31.29 yuan in 2001, the price of Kweichow Moutai has been slowly rising, and has now exceeded 1,100 yuan. Many things seem to be expensive when they are bought, but afterwards, it is not expensive when you buy them.

in conclusion

If we believe that there will be a big bull market next, then we should hold two kinds of assets: one is bitcoin, and the other is mainstream platform coins like HT and BNB. If you are a risk-seeking investor who wants to fight, you can buy some altcoins.

In any case, the 2017 altcoin super bull market has passed. Maybe we can also witness the rise of some star public chains and currencies in this round, but the possibility of repeating the 2017 road is not great. Because today's altcoin has become extremely rampant compared to 2017.

The last thing I want to say is that investment is not a simple gamble. It's best to stay awake when we take the money out of our pockets and make an investment we can understand.

Author: Helium 5

Editor: Qin Jin

Produced: Carbon Chain Value (ID: cc-value)