On the afternoon of April 2nd, the Yinyin Mine Pool organized an online "See You Fengshui" live broadcast conference. In the opening "Global Financial Analysis" session, the Yinyin founder Pan Zhibiao asked Wan Hui, the founding partner of Primitive Ventures Pan Chao, head of MakerDAO China, Yang Zhou, CEO of PayPal Finance, and Liu Fei, CEO of Binxin Mining, raised several sharp questions.
We have intercepted four of these particularly interesting questions. Their thinking may change your view of Bitcoin's halving the bull market, its understanding of Bitcoin's risk-averse nature, its understanding of the 312 plunge, a rethinking of the performance of the public chain, and the high leverage behavior prevailing in the currency circle Reflection.
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▲ From left: Yang Zhou, Liu Fei, Pan Zhibiao, Wan Hui (video), Pan Chao (video)
Question 1. How long will the global epidemic and central bank release water play a role in the cryptocurrency industry?
Liu Fei: The free bitcoin market is particularly prone to trample
Such flooding will not affect the cryptocurrency market at once. Its impact is to slowly extend from one area to another. First of all, the liquidity of US assets such as US debt and US stocks has shown performance, while the performance of alternative assets such as Bitcoin will be relatively slow.
U.S. debt, stocks, bitcoin, they all face a problem, that is, the price is supported by very small money. For example, in the stock market, the market value looks very high, such as 1 trillion, but there is actually only 10 billion of liquidity behind it. Judging from the current situation of US stocks, its liquidity is supported by hedge funds, but the leverage ratio of hedge funds is very high.
This time, everyone felt that the economic crisis was coming and needed cash, but everyone had no money. How to do it? Selling assets, but for 10,000 yuan, when no one sells 100 yuan, there is no one to take over. This is a liquidity crisis.
Today, the Fed has unlimited QE, which has challenged many concepts. At first, everyone believed that U.S. debt is risk-free, but today the interest rate of U.S. debt becomes zero, so the market will doubt the original pricing model of the commodity. Today, funds still dare not be used boldly (purchasing assets), mainly because of lack of confidence. The crisis stopped many hedge funds, which in turn caused a liquidity crisis. This time, U.S. Treasury bonds and stocks also had no liquidity, and no one took the order.
In the currency circle, Bitcoin's deleveraging is very rapid and tragic. We have all seen that because there is no fuse mechanism, no central bank, and no liquidity supplement method, this free market is particularly prone to trample.
Of course, the purpose of QE is to provide liquidity. Slowly, when the mainstream US market improves, it will eventually return to alternative assets such as Bitcoin. It will take some time. I am still quite optimistic and optimistic. So long.
Wan Hui: Bitcoin is a highly speculative financial asset and will not quickly become a beneficiary of monetary policy
We see that after the 2008 economic crisis, the central bank interest rate fell to 0, and then QE. We see that the growth of US GDP is far from the rapid growth of the market value of assets. This shows that in the past 10 years, the US dollar released by the Fed did not flow into the world economy and into areas that can bring high production growth, but all entered the field of financial assets, which is also a problem worldwide.
Friends on Wall Street said that in 2000 there was an Internet bubble, in 2008 it was a real estate bubble, and in 2020 it was a bubble of everything.
We also see that traditional financial assets actually have a lot of leverage. Looking at the current composition of U.S. stocks, more than half of the stocks are in the hands of ETF funds, and 70% of the assets are in passive investment, so the entire financial market is very "chives."
The US stock market is an unprecedented bubble. Now there is a problem, everyone does not know how to price the assets in this crisis.
I think that Bitcoin is a highly speculative asset as a financial asset. When did people start accepting high-risk assets? It must be more spare money, when the economy is relatively high in bubble. The epidemic has a very big impact on American employment. It is conservatively estimated that 10% of the total population will face unemployment. This will inevitably drag the economy into a technical recession, and there may be negative GDP growth for 2 quarters. Well, the first thing everyone thinks about is to secure jobs and jobs, and to ensure a normal life, not to say investment.
Well, Bitcoin, a highly speculative financial asset, will not become a beneficiary of monetary policy so quickly.
After the recovery of asset liquidity, it is generally the rise in real estate, the stock market, and the rise of marginal assets. In this process, participants' ability to withstand investment risks is getting higher and higher, and the entire financial asset bubble is getting bigger and bigger.
Question 2. ETH plunged and DAI liquidity is in short supply. Can DeFi go on?
Pan Chao: DeFi has come to the misunderstanding of high-leverage operation, and its foothold should be the settlement layer
We see that this time the ETH plunged, the DAI needs to be recovered for liquidation. As a result, the liquidity of the DAI is short in a short period of time, some positions have not been successfully liquidated, and the system has bad debts. There are two reasons, one is the lack of liquidity in its own market, and the other is the congestion of the Ethereum network. Its transaction fees have even been as high as 20,000-30,000 times the usual transactions.
This phenomenon has also occurred in CryptoKitties and ICOs, but this time there is a big change, that is, USDT is issued too much on Ethereum, and leveraged trading and margin trading use USDT. Everyone is buying USDT. Brought unprecedented congestion in Ethereum. And DeFi relies heavily on the network performance of Ethereum, and the network is congested, so there is no way for the DeFi application to quickly settle.
I think that this incident is a great test for DeFi, especially a concentrated reflection on the performance of the Ethereum network.
At present, I think DeFi has come to a misunderstanding, that is, high leverage operation, which is exactly the opposite of DeFi's original intention. Bitcoin was born in the financial crisis, so its original intention is different from Bitcoin. However, people have a tendency to pursue high leverage. The starting point of DeFi products should be the settlement layer, it is not a network for trading or margin trading.
Question 3: When USDT moves out of the currency circle and enters the foreign trade circle, will it replace Bitcoin as a "global currency"?
Yang Zhou: As long as crypto finance is not restricted by the banking financial system, there is always room for it
The popularity of stablecoins is not about hurting bitcoin, it is about getting cryptocurrencies into a more mainstream field.
In my opinion, bitcoin may be halved two more times, and its volatility may become a financial product second only to the US dollar. At that time, it may become a very good payment tool. But at present, it is more like a speculative product, and everyone will accept USDT assets more easily.
At present, the main use of USDT is still in the currency circle, but recently we have noticed that it is used in some cross-border transactions. Whether it will become widely used depends entirely on the financial development process.
At present, populism is on the rise and there is a process of counter-globalization. As long as encrypted finance is not restricted by the banking financial system, there is always room for it to play, but it depends on the development of the entire political economy.
Liu Fei: USDT is used a lot in the Chinese community, it brings new users
A few years ago, Amazon merchants used Bitcoin as an intermediary to go back and forth. Now, including China and Southeast Asia trade, everyone chooses to use USDT for circulation. It should be said that USDT has been used a lot in the Chinese community. For example, Chinese merchants in Spain and Italy are using Bitcoin and USDT to ship money domestically.
The original effect of USDT on Bitcoin was indeed weakened, but it should also be noted that some people did not accept the high volatility of Bitcoin, and stablecoin brought new users.
But there is a question, how much is the stable currency value, first of all depends on how much the main chain is based on? If the value of assets circulating on the main chain exceeds the value of the main chain, problems may occur. What is the value of the main chain, how much value can be carried.
In this plunge, Ethereum was completely blocked. Bitcoin did not produce blocks within 50 minutes, the OTC channel was broken, and no one could fill the position. Therefore, Bitcoin and Ethereum need to have strong performance and sufficient value. In the long run, the growth of these stable coins will promote the audience and value of Bitcoin and digital currency.
Wan Hui: USDT will not be replaced by compliant USD
I don't think USDT will be replaced by a compliant USD currency.
1. In many cases, in order to use USDT, in order to reduce the cost of compliance with legal currency and the banking system, it will not be replaced for a long time.
2. Many people may be skeptical about USDT. It is not a 100% reserve guarantee and there is a risk of running. But its value is reflected in liquidity. Unlike worrying about 100%, USDT has become a symbol of liquidity in the circulation process and will continue to exist for a long time. Coupled with the network effect, it is also difficult to be replaced by other stablecoins. For example, USDC was born very well. It may be far away from other stable coins of 3-6, but there is still a big gap with USDT. I am not very optimistic about compliant stable coins.
Pan Chao: Stablecoin will be a "three-legged" situation
USDT uses scenes between Southeast Asia and Russia, and we know it is all gray. In the field of e-commerce and payment, they are reluctant to contact USDT because it has regulatory risks.
Having said that, stablecoins will be a "three-legged" situation . In the white world, regulated stablecoins will appear; in the gray world, USDT will always exist, it has a network effect; in the native world of cryptocurrencies, there will be native stablecoins. But it will take time to see the prosperity of native stablecoins.
Question 4: BCH will be halved after one week, BTC will be halved after one month, will the halving market come?
Yang Zhou: By the end of 2021, optimism is expected to be the craziest time
There should be confidence in cryptocurrencies and bitcoin. The halving of the market has been halving for a few months, reaching its peak in 18 months. By the end of 2021, optimism is expected to be the craziest time.
Before the halving were stories, hype. Before and after the halving, there will definitely be an important deleveraging event. After deleveraging, you can become as light as a bird and slowly rise.
Liu Fei: Assets are looking for anchors, institutions that really configure Bitcoin may be coming
Every halving will not go up for no reason.
For the first time, the economic crisis, the crisis in Cyprus, brought a lot of exposure to Bitcoin and a large number of users.
The second time, the first crazy areas were Japan and South Korea. In Japan, cryptocurrencies are beginning to follow a compliance path. South Korea was due to the Korean nuclear crisis. At that time, China's 20,000 bitcoins were sold in South Korea for 30,000. I asked Koreans who have experienced this history why they bought Bitcoin. It turned out that Seoul is very close to North Korea, the house is easily attacked by missiles, and South Koreans have restrictions on buying dollars, and gold is heavy and not easy to carry. There was no way to find Bitcoin.
This time, we say that this is the third time the asset is seeking anchor . I once talked with a person in Qiaoshui, he is very optimistic about digital currency, thinking that in the next 2-5 years, Bitcoin will skyrocket. why? He said that there is a lot of money in pensions, stocks, and ETFs, but its liquidity is very small. As aging comes, everyone will sell stocks, causing a crash, and many assets will crash.
Then, we need to seek anchor for the third time, which means that institutions will be forced to choose assets like Bitcoin in the future. They are not trading institutions, but family funds and mutual funds. They come to hedge risks. They will allocate and hold There is Bitcoin, not transactions. During this halving period, we may see such stories.
Wan Hui: halving the market price is "wishful thinking", the bull market may come later than before
Then we look at the halving of Bitcoin, there are two major structural changes this year.
1. The last halving, the trading market is dominated by spot. Today, it is dominated by the futures and derivatives markets. 2. Bitcoin was born in the last financial crisis, but has not experienced a financial crisis. It is still a very speculative alternative asset in the eyes of most institutions. We see that these institutions come in (coin circles) to do transactions, not to say that they come in to configure and hold Bitcoin.
These two structural changes have led to our "wishful thinking" about the halving period.
The competition in mining is very full, it is a global energy arbitrage. If your energy cost is not low enough, simply looking forward to halving the market, it is a very bad investment behavior, especially if you also add a lot of leverage if.
My and Fei Ge's views are different. We see that the previous two rounds of bull markets were basically also bull markets for US stocks. The phased highs of US stocks will be 2-3 months earlier than the phased highs of Bitcoin.
We are in several superimposed economic cycles. If there is a global economic recession, the bull market may come later than before.
There is another difference. Previously, the spot market dominated, and there will be a large number of unilateral rises. It is now dominated by the futures market, and once a high-to-short ratio anomaly occurs, a large number of liquidation may occur. In other words, the price will have repeated regression of the mean value.
Overall, I do n’t think the rate and rate of increase in this halving will be as fast as it used to be.