Analysis: Why can't we blindly be optimistic about the next round of bitcoin halving?

According to the mining rules of Bitcoin, in 2008, the creation block excavated 50 rewards, and then reduced by half every four years, that is, 25 in 2012, 12.5 in 2016, 6.25 in 2020, and 21 million in 2140. The BTC was dug out all, and the Bitcoin mining awards also bid farewell to the historical stage.

According to the historical price chart of Bitcoin, it seems that every time the bitcoin is halved, the market will have a big market of bears and cows.

In 2012, bitcoin halved prices soared 130 times. In 2016, bitcoin halved prices soared 120 times, hitting a peak of $20089.

01

"Blind" psychological construction under the expectation of halving

Around May 2020, Bitcoin will halve the third mining award. Will this be the starting point for the next round of digital asset market?

I think most people are looking forward to the fact that the historical law can be fulfilled again. If that is the case, the bitcoin price will rebound from the bottom of $3,520 to around $300,000. Think about it, people have a kind of "cool" that can't be said.

Mark Twain said, "History will not be repeated simply, but it will always be strikingly similar."

100 times not enough, 50 times is not exaggerated, 100,000 US dollars is appropriate; 50 times is not enough, 10 times can always be, 30,000 dollars is appropriate; 10 times if not, 5 times is conservative, Then sprint a 20,000 US dollars properly. There are always people around you to persuade you, now invest in bitcoin, doubling after halving is absolutely no problem, at least can outweigh the vast majority of wealth management products.

Is this really the case?

Most people understand that past established facts cannot be used as a basis for future investment decisions, but most people also make a mistake. They believe that multiple established and regular facts "high probability" can be used as a basis for judgment.

The law of history, you believe it does not believe, it is not controlled by your supervisor's will, just like throwing coins, 9 times throwing are positive words, everyone thinks without fear, the 10th big probability will be positive. The truth is that the probability of each positive and negative is always 50%. Probability will never change and become just what everyone expects.

According to CoinMarketCap data, the total market capitalization of the blockchain industry is now $234.3 billion. The plates are not too small, and Bitcoin accounts for 65% of the total market value. A halving of Bitcoin may bring a better turn to the market, but it is unlikely that the entire blockchain industry will drive a mad cow again.

However, the large increase after halving has caused people to unconsciously produce too blind "psychological construction" expectations.

02

"Look at" decision under optimism

And based on the blind "optimistic" sentiment of high probability rise, most of the decisions in the market are invisible.

Some Internet practitioners began to cross the border into the blockchain industry for gold mining. They believe that the long bear market has passed, and it is time for the wind to enter the market; some institutional funds have begun to include bitcoin in the portfolio, and expect to see the overall market investment income down. Bitcoin can stand out from the crowd; bitcoin miners originally sold coins every day to pay for electricity, and now they would rather not sell, waiting for the halving of the market;

The "funds project party" is also active in planning white papers, imagining that through the hot money of the bull market, another hundred yuan of coins can be harvested; contract players have become "daring", waiting for the market to start, 10 times 100 times leverage to see more earned pots full; retail investors have also become Buddhist, and the market is volatile, holding coins to the big bull market is not too late; the silks have become crazy, houses, credit cards, etc. All Stud, one or two years of suffering, the opportunity to gamble once is worth it.

You see, the market is still like that, the ups and downs are unknown, the unstable market factors have not changed, but the market sentiment and the actions of some people have long been "see more."

There are a lot of leverage on the funds, and there is a risk of breaking the position in minutes, so that your funds are zero. However, there are many emotions and actions, and there are hidden costs that cannot be ignored. It is even less than the loss of pure funds. For example, the currency will lock the liquidity of funds, and the cross-border will generate opportunity costs. The crazy contract operation will Losing all the principal, the Stud House gamble will lose all the cards and so on. This is actually a hidden cost under “blind” optimism, including economic costs, social costs, and even population costs (tops).

The real horrible influence is not that the past has caused losses, but with the wrong methodologies and values ​​to face the unknown. If the money is lost, you can earn it again. However, if the method is wrong, it is likely to be wrong again, until you lose the principal or even all the cards.

So, what kind of cognition should we use to welcome the arrival of the next bull market?

03

"Bear and Bear Conversion" cycle under supply and demand adjustment

The market's "blind" optimism will generally appear in the period of the conversion of the bulls and bears. Not only does the digital asset market exist, but also in the traditional stock market securities market, and even the larger "Kangbo" economic cycle.

However, the problem is that prosperity, recession, depression, and recovery, such a cycle of the market cycle can occur as short as 2-4 years, and it will last for forty or fifty years. How do you determine certain and sure you can step on the point? What? After all, not everyone has the same general judgment ability as Rockefeller.

Although the prosperity and decline of the economic cycle are unpredictable, there are also inherent economic laws to follow. Downstream consumer demand stimulates production capacity in the middle and upper reaches. Once the downstream demand is insufficient, the midstream merchants will generate inventory. When the inventory is accumulated to a certain extent, the merchant will “clear the inventory”, and the upstream manufacturers will stop production capacity, and the economy will begin to decline. Conversely, if the downstream consumer demand is greater than the supply, it will have the opposite effect.

The economic cycle of traditional industries, the financial securities market and the digital market are also followed. It should be said that any economic system will have supply and demand, and there will be irrational expectations. After a certain period of time, it will also breed a bubble. The digital asset market is no exception. Moreover, digital assets such as Bitcoin are relatively easy to produce an "expected psychology" amplification effect, and it is more likely to produce a time span effect of "sucking and eating", and the consequences of prosperity and decline are often magnified geometrically.

However, digital assets such as Bitcoin have not yet found a large-scale popular application scenario. The impact of supply and demand is the consensus of the coin and the circulation of trading hands. The real application layer, its market demand for peer-to-peer electronic payment is far from being. Therefore, the digital asset market where Bitcoin is located is still only a mid-upstream market driven by “expectation”. It will produce bubbles at a faster rate and break faster, and the speed of conversion will be faster.

From this logic, the birth of a bull market must be a greater "demand" beyond the existing market stock.

04

The stock market is not enough to launch a bull market

At first glance, the halving of Bitcoin does affect the market supply and demand. The newly-exploited bitcoin is reduced from 1800 to 900. The market will need more and more bitcoin, and the new bitcoin will be reduced every day. However, the shortage of supply will directly lead to the rise in bitcoin prices.

This assumes that the logic is not wrong, but ignores an established fact: Bitcoin has already dug up 18 million pieces, except for the lost 3 million pieces, and there are 15 million bitcoins circulating in the market. At present, the depth and volume of trading of Bitcoin is far from the level of the previous round of bull market. How can we believe that the 3 million bitcoins that have not been dug can be turned back to life?

Everyone knows that bitcoin prices have to be pulled up only by incremental users and funds. When a user of a certain day has doubled, more people need to buy bitcoin, they will buy it from people who hold bitcoin, and those who hold bitcoin have a higher price expectation of coin demand. This will generate a premium and drive the price of Bitcoin to climb.

It can be said that most people's demand for bitcoin is still limited to the coin, except for the miners who need a lot of power in the competition. These miners have to sell coins every day in order to maintain cash flow. If the demand for buying coins in the market is lower than the amount of miners selling coins, the price of bitcoin may fall. On the contrary, it will directly stimulate the rise.

The halving of Bitcoin is expected to make some miners no longer sell coins, so that the stock of bitcoin in the market can not meet the market demand, thus pushing up the price. However, the cost of mining is so large, the cost of digging a bitcoin in the future may be Will reach $ 9,000, miners may not continue to sell coins. Some people have calculated the mining cost. When the bitcoin calculation power exceeds 100E, the total power consumption of mining will reach 6 million kilowatts. On average, 6 million kilowatts of electricity will be burned every hour. According to the calculation of 3.5 kilowatts per hour, one hour of mining The cost will cost 2.1 million yuan. 咋 may not sell?

Conversely, if the market price does not meet expectations after Bitcoin is halved, the miners will not be able to make a series of collapses if they do not make enough. Frequent mine disasters and panic-stricken smashing will instantly turn the cattle into bears. The overdraft market expects the bull market and destroys the confidence of the market in the popularization of blockchain technology, resulting in more terrible consequences.

In the stock market, there will be an imbalance between supply and demand in a short period of time, resulting in a bull market, but often the duration will be short. There is no bull market that lasts for a long time, just like the highest price of the trading volume, it is just a price mirage. How many more people can really benefit from the bull market? This is the embarrassment of the current bull market in the stock market, with an increase but no support.

05

Key variables before the next bull market

If pure speculation can concoct "fake" bull market, then the bull market born at the end of 2017, from the perspective of the bottoming institutions, is relatively "true."

The 1CO model set up by the Ethereum smart contract not only changed the traditional investment and financing model, but also continued the main theme of the mass entrepreneurship and innovation, and set off a wave of blockchain industry boom. The hot money, innovative talents, and various entrepreneurial projects of investment institutions have brought money to the blockchain industry for a time, created supply and demand, and pulled into the entrepreneurial innovation force.

Therefore, in 2017, the grand saga of the 100-currency contends was staged, and many crepe were counter-attacked and embarked on the road of wealth freedom. But what about the upcoming "bull market" in 2020? There are also certain increments, but whether it can undertake or even carry forward the glory of 2017, there are still many "keywords" variables.

1. The institution enters the market. There is a saying that the last round of bull market was promoted by retail investors, and the next round of bull market will be driven by institutions. The organization's money is larger, the depth is stronger, and the layout is more stable. In theory, the market price will be raised to a new height that cannot be imagined. However, institutions buy coins, unlike retail investors just to make value-added space.

The facts show that the organization's hot money is more inclined to invest in money-making machines rather than appreciation space. Institutional investment in Bitcoin, only because Bitcoin represents the broadest blockchain technology consensus, will become a hard currency that leads the blockchain technology to deepen in the future. The agency will grab some chips in advance, just paving the way for the future development of the blockchain technology industry. Attracting more institutions to enter and enter the market, you still have to rely on a steady stream of innovative projects, such as DeFi, cross-chain, layer 2 and many other emerging areas.

Don't assume that the institutions will come in and buy them. Those financial predators have played tricks of making money out of thin air. They may want to save money from their pockets to fatten the market you have already occupied.

2. Supervise the black swan. Since 1025, the national top-level design has made blockchain technology a core breakthrough, which has given the weak digital asset market a strong boost, which indicates that the regulatory layer is gradually becoming clearer. But is the "blockchain" in the eyes of 50s and 60s really the same as the "blockchain" in everyone's eyes? When the black swan event is supervised, a little bit of scraping, and the Token mechanism and decentralization are stripped from the current blockchain technology field, will the blockchain industry still have a soul?

These are all variable factors that are not optimistic. In fact, isn't the core technology that the blockchain industry has to overcome now is the rationality of the Token model and the security and operational efficiency under decentralization? Without this, the blockchain technology is only equal to the upgraded version of the Internet, interesting, but certainly not sexy. The key point is, can the existing blockchain borrow the policy to order the digital economy?

How to leverage, how to achieve the integration of the alliance chain and the public chain, how to make the Token mechanism compliant, can not want to, but also have to think.

3. Order reconstruction. The growth of any economy is inseparable from the accumulation of innovative talent. In the early days, the industry trend of speculating on coins and speculation, invisibly, will drive a large number of innovative talents out of the car. I have found that the landscape of the digital asset market can be well explained by the "survivor bias" theory. Those who use the rules of history to recharge their faith are mostly survivors of the last two rounds of bull markets. They are only a very small number of people who benefit, and few people can copy their path of counterattack. In contrast, we should look at how most people are washed off the car? That is the experience and lessons of blood.

The Token mechanism was originally used to motivate the community's eco-economic model, and under the speculation of people and gamblers, it became a poison that stifles innovation in the cradle. Technology and model innovation are the only rules that give birth to new projects. Under the leadership of 1CO and even 1EO, they have become the scolding of the IQ tax. This ecology is currently too disorderly. The blockchain ecology requires too many standards and re-enactment of the rules and order, so that the disorderly development of barbaric growth will bury hidden dangers for the maturity and stability of the industry.

Now ask the critical point of the bull market incremental market, you must know what I want to express: value, innovation, order. To achieve a real big bull market, we need the trial and error of capital, the dedication of talents, the foundation of entrepreneurial innovation, and the precipitation of time.

06

The digital economy, the fundamentals of the inevitable arrival of the bull market

Said a big paragraph next year, the bull market should not be blindly optimistic reasons, some people are starting to feel bad, you do not let us see more, you will be empty. On the contrary, I am absolutely bullish.

Li Xiao said: "In the short term, no digital asset is absolutely bullish, but in the long run it must be rising." Just as the absolute force driving stock market growth must be fundamental economic growth, the driving force for digital assets is the future. The arrival of the digital economy society. You can't deny that the economy will grow and the society will improve?

Most people think that stocks are ups and downs and they are used to thinking that it is the banker's control of harvesting retail investors. The digital asset market is considered to be the battlefield of the banker because of the small market plate. In the cognition of these people, the market is full of lure, and the market falls down to harvest. Anyway, it is a banner of the dealer, and the retail investors are all slaughtered by the meat on the chopping board. Is this really the case?

How can retail investors be so stupid, those gamblers who have short-term interests are the smartest in the world, and they know how to avoid disadvantages. The reason why they are really stupid from the results is that they are smart because they are clever. If you look at the models that play the funds, the project side will look like an innocent look. Are they really stupid? You know, when an avalanche comes, no snowflake is innocent.

Productivity is improving, technology is developing, collaboration is deepening, efficiency is improving, and we need to see the driving force behind the growth of any securities-type investment target. This is the first step for retail investors to promote rational cognition, clear the zero-sum game conspiracy theory, and get rid of persecution paranoia.

From the perspective of trend development, the transition of the Internet to the digital economy is inevitable. The reason is simple: the connection form of the information Internet with virtual vest identity and information flow replication is invading the privacy of individuals, scouring the integrity of society and increasing the cost of assistance, while the value of the Internet is connected by distributed database and the connection of digital and asset. The way to refactor this.

Facebook is engaged in Libra, the central bank is doing DECP, and they are paving the way for the digital economy. And digital assets such as Bitcoin are likely to become the anchor of the value of the future digital economy world. This is not just a wishful thinking. Projects and teams that really do things in the blockchain ecosystem understand what the value of precipitation is.

If we add a footnote to the bull market of the digital asset market in the next three years, I hope that the upstream and downstream industries of innovation power, capital market, talent echelon, and landing applications will be activated and opened up, and the grand opening of the blockchain mass entrepreneurship will be officially staged. Believe that the new market rules order, new technology development standards, new transaction supply and demand models, new ways of collaboration, etc. will bring a big change to the Internet economy, then the new Ali Tencent, the new Weibo, the new US group Comments, new Didi travel may be reborn again based on the blockchain soil. The cow is not a cow, you said.

Not blindly optimistic, in essence is true optimism.

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Blockchain value cognition evangelists, senior blockchain practitioners. There is no such thing as a tall concept, no unconventional technical explanations, only the most popular business, the most keen perspective, and the most unique insights.

Author's WeChat: tmel0211 WeChat public number: ai-heikeji