On June 6th, at the Cocos-BCX public beta conference, BlockVC investment partner Kira shared the theme of “The Blockchain Investment Law under the New Cycle”.
He said that the recent rise in Bitcoin is the result of the entry of North American investors. Recently, the very hot Grayscale BitcoinTrust is calculated according to its price. The price of each hidden bitcoin is 10,180 dollars, which means that US institutional investors want to purchase bitcoin through their trust products, which is more than directly bought in the market. Bitcoin pays a 28% premium.
In addition, by observing the price cycle of Bitcoin, we can find that the long period is three and a half years, and the short period is 7.4 months. Starting from 2010, the 42 month period is nested with a small period of 7.4 months. Leading to a sharp increase, he predicted that the next one is more suitable for admission at the end of July and early August.
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The following is the sharing of Kira, published by Babbitt.
Today, I will talk to you about some of the more relaxed topics, far from the game, and closer to the speculative currency.
Recently, I feel that there are many conflicts in the market: the first conflict is that there is a big conflict between the long and short movements of Bitcoin. There are many people who open the order at 6600 points. The explosion is almost the same, and there are many people at 8800. Clicking on more than one order, it is almost the same.
The second conflict came from CICC’s recently released configuration report. Because I used to invest in traditional securities, many people in my circle thought that Bitcoin was cool. As a result, I found that Bitcoin sneaked up to nine thousand. Became one of the best performing assets in the past six months.
The third conflict is the lunch of Bavent and a big currency. I feel a lot of tearing. Traditional investors seem to start to face Bitcoin, but the currency doesn't know if their coins can continue to be held. So today let's explore this issue.
In fact, today we look at Bitcoin, which is rarely viewed from the perspective of a coin. Generally speaking, when it comes to the product category, there is a strange phenomenon. The Fed released the latest report on June 4, which strengthened the Fed’s interest rate cut expectations. That is to say, the indicators of the US economy have finally collapsed. Trump’s policy and tax reform have come to an end. The US manufacturing PMI index has continued to decline, and has fallen to a new low since October 2016. So the United States wants to release water. Generally speaking, after the release of water, the stock will rise. Because the liquidity will increase, the price of risky assets will increase. However, we are pleased to find that the US stocks have not risen, but have collapsed. But gold is rising, and few people associate gold's rise with bitcoin's rise.
Why do you say this? I have taken a screenshot of CICC’s report. You can see that there are three assets that perform best in the past two months. The first one is undoubtedly Bitcoin, the second is VIX long (panic index), and the third is Soybeans, mainly because of trade wars.
Based on these three factors, we found that gold began to rise, because the price of gold is linked to the real interest rate of the United States, which represents the nominal interest rate minus the inflation rate. Now there is no change in inflation in the United States, but if the interest rate is released, the nominal interest rate will fall. In fact, it is good for gold. In theory, bonds should also rise, but it is a peculiar phenomenon that US bonds are not rising.
On the other hand, everyone said that bitcoin has risen from 3,000 to 8,000. It is because of the Sino-US trade war. Everyone panics. Personally, this statement is more bloody. If the Sino-US trade war has an impact on bitcoin prices, it will go with gold. More like. Because the global manufacturing industry will play a trade war will have an effect, that is, into a relatively serious inflation, the recent US tax increase in China and Mexico, may lead to US inflation at the end of this year or early next year, this problem is very serious. The rise in gold is actually leading, and it is a reaction to the US's immediate economic recession and rising inflation rate, so the rise of gold and the rise of bitcoin is a logic.
We have summarized the transmission from macroeconomics to bitcoin, with three conduction paths:
First, if global central banks, including many countries in the European Union, Australia and Canada have recently begun to release water, there will be a problem in global water release. You can’t buy cheap assets and asset shortages, which will lead to no good buy in the world except gold. Bitcoin can be bought, which embodies its safe-haven properties.
Second, with the high debt ratio constraint, we can see from which angle the US collapse will start. The debt ratio of US listed companies has already exploded. At the same time, the US private sector debt ratio is the same. The high debt ratio leads to the failure of monetary policy. Will affect the stability of the currency, and the dollar will burst.
Third, trade frictions around the world have created inflation problems. Bitcoin and gold have many different attributes, but one thing is similar, that is, they are more sensitive to inflation. If there is a relative inflation in a certain region of the world or the world, these two assets will generally respond.
We look at the world's major assets. Since 2011, Bitcoin has a fair market price, and we have found that its risk-reward ratio has always been the highest.
Why is Bitcoin going up recently? Many people don't know why, of course, there are factors that it rebounds, but we observe that this wave of rise is the result of the entry of North American investors. Recently, the highly speculative Grayscale BitcoinTrust is calculated according to its price. The price of each hidden bitcoin is 10,180 dollars, and the current market price of bitcoin is only 7,800 dollars, which means that US institutional investors want to pass their trust. The purchase of bitcoin products is nearly 30% more than buying bitcoin directly in the market. The specific explanation may be that the degree of compliance is relatively high, resulting in a certain premium, but a premium of more than 28%, which exists in the market arbitrage The world is really outrageous. It can only be said that Americans are running into the market.
What do we want to explain? You may be over-focused on short-term premium volatility, ignoring where we are in the long run. We have done some research to try to show where we are now. Unchained Capital made a report "Bitcoin UTXO Age Distribution", showing that the new cycle has been opened, now from HoldWave to Halving. Many people may be speculating every day, but in the United States, bitcoin holders, their behavior is long-term investment. I drew a few white lines, which is the long-term currency in the history of the previous cycle. The first time was the creation period in 2009. There are only some technology geeks and early miners in the world who have coins. They are squatting, then 2012. In 2014 and 2014, we just opened the fourth cycle.
This cycle refers to the proportion of UTXOs with a certain period of time. We find that the short-term investors' UTXO ratio is getting higher and higher, representing many people are entering the new market. It is estimated that the time of the fourth cycle is started by this HodlWave. On February 10, 2019, we also looked at the trend of bitcoin and the trend of the cycle through some quantitative algorithms and spectrum. We found that Bitcoin has two cycles, which are similar to many commodities, with long cycle and short cycle. The long period is three and a half years, and the short period is 7.4 months. Therefore, the price of Bitcoin is calculated from 2010. It is a small period of 7.4 months nested in the 42 month period. The two periods are so long that the wave rises sharply. We predict that the next one is more suitable for admission at the end of July and early August.
Another big cycle that assists us in the cycle judgment is that Bitcoin will be halved in May next year. According to the price trend before and after the halving of Bitcoin in history, the upward trend can be found. The first halving is November 2012, the second time. It is July 2016, the third time will be May 2020. There is a very fun thing to do. Everyone generally looks at the price after halving, and rarely pays attention to what happened half a year ago. Maybe it’s a coincidence. Half a year and a half ago, it was often the low point of the price. After digesting, it began to accelerate the rising stage. This is also an important indicator for the opening of our new cycle.
In the context of such a cycle, we believe that the best time to invest in Bitcoin is 2011, the second best time is January 2019, followed by now.