"Half" and "Fed rate cut", the two big exams Bitcoin faces

According to statistics from qkl123.com, Bitcoin has about 67 days to go before its third production halving in history, and the number of remaining blocks is 9901. In addition, before the "halving" occurred, "the Fed unconventional interest rate cuts" The incident also aroused the attention of many people.

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Although the bitcoin market has fallen recently, miners are still very enthusiastic about mining. As of press time, the hashrate of the entire bitcoin network is about 118.33 EH / s, which remains at a historical high.

Regarding the impact of the "halving" event and the "Fed rate cut" event on the market, there is a serious disagreement among market participants. According to the author's recent observations, in general, the views of most early participants are more positive. Participants who entered after 16 years tend to be neutral or pessimistic.

Blurred lines between investing and gambling

Before analyzing the impact of the halving and the recent "Fed rate cut" incident, first ask everyone a question. Do you think participating in cryptocurrencies is an investment or gambling?

According to different objects, the answers can be roughly divided into three types:

  1. Participation in cryptocurrencies is an investment;
  2. Participation in cryptocurrencies is gambling;
  3. As the case may be;

The author guesses that the proportion of people who currently agree with the second answer will be higher.

In fact, the boundary between gambling and investment is very vague in itself. We can even say that any investment involves a gambling component. Even government bonds and bank savings, which are known as "risk-free investments," cannot be packed to say that they will be profitable. .

We all know that the phrase "risk is proportional to return" is almost a truth without involving malicious deception.

Man holding a money bag full of Bucks

(Picture from: tuchong.com)

Therefore, the general public tends to consider low-risk targets (such as national debt, gold, etc.) as investments, and target (such as poker games) with a profit probability of less than 50% as gambling. However, not all targets are this For example, a VC with a very small profit probability is still considered as an investment, but the word "risk" is added, and the profit probability is almost negligible, and there is no lack of people to consider it as a kind of investment. investment.

Regarding cryptocurrencies, I still prefer the third answer, which depends on the situation.

How to understand it?

For example, if A borrows money to buy USDT, and then uses leverage to participate in altcoin transactions, the risk of this operation is great, and the leverage ratio is directly proportional to the speed of losing money. In this case, we Think of it as gambling.

For another example, Spot B participates in cryptocurrency trading, but he puts the currency on an exchange such as Fcoin. It turns out that the risk is also very large. In this case, we can also consider it to be gambling.

Under what circumstances can we not consider it gambling?

For example, Twitter founder Jack Dorsey has revealed that he will vote for $ 10,000 a week in Bitcoin, which is a fraction of the value of his multi-billion dollar value. It is important that he does not buy the bitcoin he bought. On the exchange, you control the private key yourself, thereby minimizing the risk.

Of course, I believe that there are very few people who can do this. Most of the participants will not control the risk, and tend to "shovel" and "strive miracles".

About the impact of "halving" and "fed rate cut incident" events on bitcoin

After talking about the risks and benefits, let's officially enter the topic to be discussed today. Many people are confused about the impact of "halving" and "fed interest rate cuts" on Bitcoin. On the one hand, a bunch of Bitcoin big V will Shout list:

"Bitcoin production is about to be halved, the Federal Reserve cuts interest rates again, and bought Bitcoin …"

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However, recent market performance is inconsistent with these views.

Therefore, many people will doubt whether the "halving" and "interest-rate reduction" events have already been price in. Is Bitcoin's "electronic gold" status falsified?

In an article written last year, the author wrote that the Bitcoin market is jointly determined by different participants, which is a consensus process.

In other words, the market rarely changes in accordance with the opinions expressed by individuals, and when the funding consensus is skewed to the right, the entire market will tend to rise, and vice versa.

Some opinions expressed in the market are part of the consensus process, they will affect the behavior of participants, and thus feed back into the market price.

The "Fed rate cut" incident is an external factor. The impact of these external factors on Bitcoin is mainly related to the opinions of vested interests on the market. If their opinions can convince some people to agree with their views and then act accordingly, It can be fed back to the price, otherwise this effect can be ignored.

The nature of the "halving" event is slightly different, because it involves the relationship between supply and demand, and supply and demand determine the price.

But because the "halving" event is indeed a deterministic event, the market price will indeed be "price in", that is, some participants will react to this event in advance.

However, the Bitcoin market is highly complex, and this early response does not mean that participants have considered all possible scenarios.

Therefore, individuals will tend to think that after the production has been halved and market sentiment has stabilized, the decrease in new supply will indeed have a positive impact on market prices, but the final market price still depends on the consensus direction of the market , And past experience can only be used as a reference.

As for the specific price prediction, in fact, everyone put forward only a guess, some are based on their heads, some are calculated based on historical experience and models, and this can only indicate whether they are optimistic about cryptocurrencies.

Is there any reliable data that can help us judge? In fact, Bitcoin uses the UTXO (Unspent Transaction Output) structure, and all UTXOs will have a timestamp when they are generated. Therefore, we can use UTXO to determine the age of Bitcoin (this age refers to the last time Interval between transactions).

Then someone proposed a very interesting indicator called Bitcoin HODL Waves.

5059B2AD-EE92-4A9F-B582-F09DCF3910E7

(Data from hodlwave)

According to statistics, the recent "HODL" index has indeed risen, which may be related to participants' expectations of "halving".

Of course, this does not mean that this trend will also appear in the future, which is the so-called uncertainty of market consensus.

The shouting behavior of multi-party and short-party players can actually be understood as that participants are expecting the butterfly effect to shake the entire market, which is actually an extremely complicated game process.

As for whether Bitcoin is "digital gold" or "hedged assets", it depends on your understanding of it.

Therefore, in order to be as objective as possible, I will not give my judgment.

Finally, summarize the "financial negative password": borrow money to speculate, leverage studs, regardless of private keys, short-term god operation, All in shitcoin …

Fortune password? Think for yourself.