If I ask a question: how to value cryptocurrencies, how to do investment analysis, if you make investment decisions into a system?
I believe many people will say that there is no such thing in the cryptocurrency. The speculative currency is a fate. When the fate is reached, it will be set.
The currency market is tied to the front line, and only a set of people.
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However, the cryptocurrency is becoming more and more mature after all, and the whole market is not the same as the bad news (9.4) that can be seen in the day. After the professional investment institutions and large funds come in, they must make an estimate of the price, so as to achieve effective control of expected returns and expected risks.
This is also why many organizations have difficulty holding cryptographic assets for a long time. Huge undetermined risks, huge retracements, etc., it is difficult for fund managers to explain to their customers. It is better to buy something that their customers can understand. , a good healthy earnings expectation.
If you are working in a fund, you are not interested in asking the leader to buy Bitcoin.
This is also why I said that the "Fudas" came into play to help the organization enter the scene. In fact, this is very similar to the childhood, if you want to buy a repeater to learn (in fact, to listen to the song), if you can cite An example of a classmate who has studied well in your class will also increase the success rate of your application to your parents.
The "Fudas" are good students in the class. If they take the lead, the resistance of other institutions will be much smaller.
But this is all afterwards.
Obviously, there is no reasonable valuation system for cryptocurrencies at present. All the so-called valuation logics will be broken by the market enthusiasm in the bull market and will be broken down in the bear market. So instead of talking about the valuation system or valuation logic of cryptocurrency, it is better to talk about the valuation game of cryptocurrency.
And such a game is actually not new in economics. After all, in the history of finance, new financial products like the current speculative coins have emerged in an endless stream, and people cannot generalize them. So people have proposed some interesting analogies.
First, the Cairns beauty pageant competition.
Keynes wrote in his 1936 book The General Theory of Employment, Interest, and Money:
“…Professional investment is like a competition held in a newspaper. The person who participates in the competition must choose the best looking face from the 100 photos. If the contestant’s choice is closest to the competition The overall average preference, then the contestant wins the award. The result is that each contestant will not choose the face he thinks is the best, but will choose the face that he thinks the other contestants are the best. All the contestants have the same idea. This is not a question of picking the best people according to their preferences, or even a question that everyone thinks is the best person. We have reached the third dimension, we put Ingenuity is invested in predicting what is the group view that the group view expects. I believe that some people will reach the fourth, fifth or even higher dimensions."
In fact, it is quite complicated to say, but the reason is very simple. If the criteria are not subjective criteria, but the subjective criteria of everyone, then it is important to abandon your own subjective preferences and to cater to other people's preferences.
In fact, this is the same logic in multiple markets.
Second, the liar's playing cards
The Liar's playing card is a game that combines statistical judgment and bluffing. It uses the eight-digit serial number on the US dollar to play the game. Players only need to find a few banknotes arbitrarily. The goal of the game is to guess the number of digits and not exceed the sum of the number of digits in the banknote serial number in all players.
To put it bluntly, everyone has a string of numbers in their hands, and then, based on some of the information they have, they can guess what kind of information they have in their hands.
If you are a Southerner, you should know that you are shaking your throat while you are drinking, and the rules are very simple. Just guessing that you and someone else's nephew add up to "a few", which is probably such a game.
In such a game, when the number of people is large, your own cards are not important. What matters is the cards in the hands of others.
So in fact, this game, the focus is to guess the cards in the hands of others, and the cards in their hands are only important when two people. As in the market, if you are someone who can influence the market, then your card is important. If you are not a person who can influence the market, then your card is not important. The important thing is always the card in the hands of others.
Third, the Brown movement.
What is Brownian motion? I believe that everyone has contact in the middle school or university courses, but it should be forgotten. This was in 1827, when the Scottish biologist Robert Brown discovered the irregular movement of pollen and other suspended tiny particles in the water, and then used this unpredictable free movement. His name is called "Brown Movement."
In 1959, more than a hundred years later, M.F.M Osborne proposed the random walk theory based on Brown's principle of motion. He believes that buyers and sellers are equally smart and witty in stock trading. It basically reflects the relationship between supply and demand; the change in stock price is similar to the "Brown movement", which has the characteristics of random walk, and its change path has no rules to follow.
Therefore, stock price volatility is unpredictable, and the prediction of future stock price movements based on technical charts is actually nonsense.
The log-normal random walk theory based on Brownian motion has gradually become the classic framework of financial market research, and laid the foundation for the development of quantitative finance.
To put it bluntly, how the price trend has been in the past is a thing of the past. How to go in the future is completely random. You can analyze the probability, but you cannot predict the trend.
All those who make "accurate" judgments on price movements are big gods.
Fourth, Fisher's equation
This is the famous Fisher equation and is often considered the first formula for economics.
Suppose that M is the average amount of currency in a certain period of time (it is the amount of money in the transaction and circulation, therefore, Fisher's equation is also called cash transaction); V is the velocity of money circulation; P is the weighted average of the prices of various commodities. Number; Y is the number of transactions for various commodities.
The Fisher equation is often used to calculate the inflation rate as well as the actual interest rate, in other words, the depreciation level of the currency.
Of course, the birth of this equation is mainly for the traditional currency. After the arrival of the “virtual currency”, that is, the comprehensive digital credit era, some special improvements need to be made.
When a cryptocurrency has a "currency" attribute in an environment, then it is closely related to the "commodity" that it can buy (not necessarily something, not a fame, a point, or a community status). This is why it is easier to calculate the Token in the community, and there is no reason for the value of hype.
I saw a report by Bloomberg before: "Bitcoin has risen, but it can't cover the reality that bitcoin is not used."
I think this is very nonsense. Is there anyone in Bitcoin who has no heart? Is it so hard to turn yourself into so many trades every day?
All those who believe that the speculation can make Bitcoin rise to a maximum of $20,000, and who are still stable at $7-8000, are unwilling to believe in the reality that Bitcoin is used.
The mindset is terrible. Anyone who doesn't do foreign trade knows that some people use cryptocurrency when they do foreign trade business. They all know that many strange places we don't touch are using bitcoin. However, many people still have a black eye and are reluctant to believe that Bitcoin is indeed used, so they think Bitcoin should be zero.
Is it nonsense?
In fact, there are many similar rules of behavioral psychology and finance. The general idea is that in a more chaotic market, or similar to zero-sum games, if you want to gain, then you must "take risks." "And you have to get the highest income, then you must exit one minute before the crash."
That is to buy at the lowest, sell at the highest, this is also the most ideal state for everyone.
In a mature market, because there are too many participants and the interests are complicated, it is impossible to make a judgment by simply guessing the choices of other people's hands and other people.
In a market similar to the currency circle, which has relatively simple participants and few participants, it can judge its own operations by judging the chips of other participants and the choices to be made.
In this way, we are really a simple circle.