Overcoming the weakness of human nature, technological innovation is the real charm of cryptocurrency.
Text: Xinyi
Over the past eight years, the investment income of Bitcoin as an asset has been unparalleled.
The latest high has exceeded 64,000 US dollars. In just 12 years, Bitcoin has doubled billions of times. The investment enthusiasm for its derivative coins has been released. Dogecoin has skyrocketed by 200% within a day, and news of this surge is endless. Laughing, dying, struggling, calm, fearful… Every player has piled up this swelling city with blood.
Bitcoin was originally a fun for geeks and Internet users, but now Wall Street elites also smell the breath of money.
After the financial crisis in 2008, the new generation of Wall Street elites lived “disaster”. Soros and Buffett seem to be the myths of the times that are difficult to reproduce.
“The best minds in the world are circled on Wall Street. They are content with a salary of hundreds of thousands of dollars a year. They are a small fish and shrimp on Wall Street. They struggle with a particularly clever technique every day to figure out whether the risk of a certain company is increased or not. A decrease of 0.1%.” Ma Zhibo, who returned from Wall Street, explained the current Bitcoin hot behind the scenes.
It is difficult for these smart people to be willing, and digital currency has become a sharp knife in their hands.
The elites at the bottom of Wall Street are “defection”, but the players at the top have made a deeper calculation. This is a “trap” of a smart person, and the bet is how many people will get in the car.
“Bitcoin is a very stupid thing in the economic sense. It is not optimistic about a deflationary financial system.” Ma Zhibo said frankly, but he still chooses to invest in Bitcoin. The reason is very simple. “For example, knowing that it will be 20 years later. Thunder, so have you not made any money for these ten years?”
After all, this is a game of drumming and spreading flowers. The weakness of human nature is like the perpetual motion machine of capital. No one wants to see the drums and flowers stop in their hands.
Smart people’s game
Perhaps this ability to inflate capital has long been engraved in the blood of Wall Street: standing at the top of wealth, the essence of all finance is no different from the exchange of symbols, and all financial games are no different from using models to bet on the rise and fall of the market.
In other words, the deviant Wall Street elites only use Bitcoin as a tool for them to make money, and the model is their good at making money.
Both the currency circle and economists have a very thorough view of the following facts-the relatively loose regulatory attitude of the United States and other advanced economies on Bitcoin is an important external factor for the continued expansion of the asset bubble of Bitcoin and other digital currencies.
Even if you understand the nature of digital currency, it is not easy to understand the laws. The long-short battle in the spot market is thrilling, and the futures market is full of traps hidden murderous opportunities, and the hearts of small players have endured too much excitement.
The swelling and dangerous currency makes Ma Zhibo, a professional player who sees everything clearly, feel “guilty”. “This kind of system is not very common. Even gold has a little increase. No one has done a long-term evolution model of an’absolute’ contraction economic system, so it is not clear what the impact is.”
Will the digital currency craze really end? Smart people know how to play the final chapter. At least for the giants, the asset allocation related to digital currency is not worth mentioning in the face of their huge asset volume.
Despite repeated warnings issued by US regulators, the temptation of money not only makes the smart people on Wall Street excited, but also stirs the nerves of financial technology companies. Bitcoin futures and related stock transactions are becoming more and more popular; banks, brokers, and exchanges. And consulting companies are also busy building infrastructure.
In fact, institutions are also a member of the coercion, and investing in digital currency has become an inevitable link.
“Institutions need to make outsiders feel that they are at the forefront of this investment, and they don’t want to be seen as too conservative or too low.” Ju Jianhua, a distinguished researcher at the Financial Technology Innovation Laboratory of Peking University, revealed to 36 krypton that he was being pushed by market sentiment. Many institutional investors are essentially a mentality that they have to participate in.
Comparison of digital reserve and cycle
At the same time, under the raging epidemic, the global economy has been damaged, and Bitcoin’s hedging properties have become more and more obvious. The currency price has increased from a low of 3,155 US dollars at the end of 2018 to more than 60,000 US dollars today.
Under these circumstances, Wall Street and Silicon Valley have aggressively entered the digital currency market. CoinShares data shows that the scale of digital currency assets managed by institutions in the first quarter of this year soared to a peak of 59 billion US dollars, while last year this figure was only 37.6 billion US dollars.
“These investors or LPs behind the institution allocate some bitcoin assets, and their demand will drive these financial institutions to enter this market.” Ju Jianhua broke the impact of the institution’s entry of digital currency.
Indeed, compared with the skyrocketing data, the statements of institutions are more stark. After applying for the launch of “Bitcoin concept stocks” in March, JPMorgan Chase predicted that the target price of Bitcoin will reach $130,000. The ARK Fund, which is already open to Bitcoin, believes that the market value of Bitcoin will eventually match or even surpass that of gold.
In the eyes of outsiders, their goal is to make Bitcoin the next stock or bond market, and their dreams have begun to shine into reality. Recently, after Canada approved the Bitcoin ETF, Coinbase, the largest digital currency exchange in the United States, announced that it has been approved by the U.S. Securities and Exchange Commission (SEC) for listing and has become a veritable “cryptocurrency first share.”
Naeem Aslam, chief market analyst at AvaTrade, pointed out that CoinbaseIPO has sent a very clear signal that regulators will not take such a strong stance on this cryptocurrency.
This has undoubtedly increased the liquidity and depth of the digital currency market. Now these big players are the real traders of digital currencies. The unbearable thrill of small players can change the situation with just a “snap finger” in the eyes of big players.
Retail meat grinder
From Space X and Tesla founder Elon Musk, Bitcoin can buy Tesla, and his enthusiasm for Dogecoin has made the market crazy. After raising the price of Dogecoin many times, Recently, he said he would use his Space X to send Dogecoin to the moon.
Turning point? Bitcoin vs. Tesla share price comparison
“Like Bitcoin, you can also play for a few thousand dollars, but when it rises to tens of thousands of dollars, it is not affordable for ordinary small retail investors.” Stay away from Wall Street and Silicon Valley. “The office worker Jia Jiawei obviously can’t understand the game of giant crocodiles, but he has already penetrated the drama of the currency circle. The sudden wealth and bankruptcy are instantaneous, and more retail investors have made wedding clothes for others.
Unlike Jia Jiawei, the idea of Li Haochen, a doctor of architecture from a prestigious British school, is close to the idea of many investors-hedging. “Global currency issuance, all money must find a way to store a fixed value. Of course, the disadvantage of Bitcoin is that not many people have reached a consensus, but this requires time and cost to cover.”
In the first few transactions that opened the door to the digital currency world in the first half of 2020, Li Haochen, who wanted to use Bitcoin as a safe-haven investment, quickly lost tens of thousands of pounds in his startup funds. It’s all dumbfounded.”
From the perspective of lengthening the entire cycle, high currency price fluctuations are also normal. In the past 12 years, the price of Bitcoin has touched the hearts of countless people like a roller coaster. The bubble burst, weakened downward, rebounded, and repaired alternately. The sudden rise and fall are not only the feedback of market sentiment, but also the abbreviated epitome of the macro trend.
In 2013, after most European countries rushed to introduce bitcoin issuance policies, the price of bitcoin exceeded US$1,147, and then fell to US$200 in 2015, but it exceeded US$1,000 in 2016, and the annual increase in 2017 was as high as 1,700%. . In 2018, the price of Bitcoin fell from 19,000 USD to around 3,000 USD.
If you hold Bitcoin firmly from the beginning, the high return on investment is really exciting. The myth of wealth expansion has stimulated the adrenaline of retail investors like Li Haochen time and time again, but the dust of the times has fallen on individuals, and it is difficult to know who will be the lucky one.
Although he is a new player, Li Haochen has keenly discovered, “Compared with Europe and the United States, many retail investors in China enter the market with a gambling mindset and use leverage to make futures contracts. They rarely look at projects. It makes no difference to follow up with casinos.”
This coincides with the fact that Chinese investors are more inclined to pay attention to short-term profits in the survey data. According to the “Global Bitcoin Development Research Report” data, in the sampled population, 80.77% of Bitcoin investors aim for short-term profits, only 13.81. % Of users choose to hold for a long time.
This kind of retail mentality makes it difficult for people to make money, but it is easier to become a leek.
Tired of working life, Jia Jiawei decided to find some “stimulation” in his life. “Credit speculation is not the same as stock speculation. It may fall by 100% a day, may rise by 300% a day, and then fall by 500%. This is all possible. This kind of skyrocketing and falling can be achieved in a minute or two or even a few seconds.”
Although he has tasted a lot of sweetness, Jia Jiawei thinks that he is still sane. “After all, it is normal for ordinary coin speculators to be unable to hold it.”
Bitcoin holders have fewer signs of selling
Li Haochen, who stepped on a high point to enter the arena, failed to “hold”, constantly questioning whether he was “cut the leeks.” According to common sense, if you start with Bitcoin in the first half of last year, it is not difficult to make a profit as long as you hold it for a period of time, but you will always encounter some uncertainties on the way to invest in Bitcoin.
As an investment target that can be traded 24*365, and lack of supervision, it is not difficult for big players to take advantage of retail players. “The community for speculating coins is always full of fake news, and there are some irregular exchanges that come to cut leeks.” Li Haochen said that he can only admit that he is unlucky. More and more dazzling.
“As long as it is not cashed out, it is not considered profitable, and it must be returned to the market in the end. There are many people who have a miserable end to those high-leverage currency speculations.
I don’t want to fry anymore…. It’s too tired to play this. “It is the state that retail investors such as Jia Jiawei and Li Haochen should have, but even with this stimulus increase, the loose supervision is still exhausting coin speculators.
Bypass the “big players”
In the matter of currency speculation, the most indispensable thing is exaggeration, deception, selling high and buying low, and information that is difficult to distinguish between true and false is flooding the entire currency circle.
“In layman’s terms, you originally made money, but someone used technology to make you lose money and dumped you off the car.” Ma Zhibo, co-founder of Companke Data, a digital financial big data company, revealed this to 36氪Nature.
According to Ma Zhibo’s observation, some irregular exchanges will go up before the market goes down, and take advantage of the time for retail investors to sleep at night before they can make a margin call. They will flatten the positions of these people and harvest all that they have previously delivered. Margin.
Ma Zhibo, who holds a PhD in Astrophysics from Case University, once worked for Goldman Sachs, a major Wall Street firm. After entering the currency circle, he still uses traditional financial methods to study digital currencies. As an expert in financial derivatives, these “irregular forces” are as brutal in his eyes as “western cowboys.”
Bitcoin rally chart, source: tradingview
Unlike the specific company bound behind each stock, digital currency is based on digital principles and is a network virtual currency generated through a large number of calculations through specific algorithms. Since the design and generation mechanism of digital currency determines that the quantity is limited, it forms the basis for the consensus that digital currency has value.
In fact, after more than ten years of mining, most of the bitcoins are firmly controlled by the bitcoin development team and a few large mining owners, so that the big players can afford admission tickets.
For new entrants of digital currency, bypass the existing minority interest groups and seek new virtual currencies to become a tacit understanding in the circle, and most of the money made in this wave of speculation is not Bitcoin.
The Doctor of Architecture didn’t struggle in the quagmire for too long, as wit as he quickly discovered the tricks, and what made Li Haochen “win” back was the few NFT coins he invested. “The rise is inexplicable, is it the Americans holding the government? Did the epidemic subsidy go to buy NFT?”
In Jia Jiawei’s community, “Because the owner of the group is better at playing DeFi, almost all of the group makes money, and only a very small number of people do not make money.”
“If you want to invest in Bitcoin, you first need to have an understanding of laws, policies, and technology trends, and at the same time use spare money to invest, and on the premise that there is no psychological pressure to lose money, can you really benefit from continuous long-term investment.” Ju Jianhua told 36氪It is reminded that Bitcoin is also a kind of financial transaction, which is also against human nature in nature. Under high volatility and high risk, it is easy to be forced out of the game if only chasing the rise and the fall.
Not speculation, but technology
No matter how high the external sentiment is, as Soochow Securities pointed out, speculative demand is the internal reason that dominates the skyrocketing Bitcoin price. However, leaving aside the crazy currency price, more than ten years after its birth, is the meaning of digital currency to the market still only in speculation?
Just like the stock market, under the diversification of players, the trading of digital currency is becoming more and more complicated, and the harvesting method is becoming more advanced and secretive.
The NFT that allowed Li Haochen to pull back the losses on Bitcoin is a typical representative. NFT (non-fungible token) refers to non-fungible tokens, which are typical asset-backed tokens, which are irreplaceable and indivisible. Different from the native tokens represented by Bitcoin, asset-backed tokens can realize the digitization of assets by “chaining” external assets or rights and interests, and the newly generated tokens can be transferred and traded in the blockchain system.
The increase in users’ willingness to pay for digital products has enabled NFTs with irreplaceable characteristics to show their talents in the virtual world. One of the important directions is to allow the virtual currency world to have physical value. According to NonFungible.com data, every year in 2019 The average selling price of NFT products is mostly less than US$50, and from August to September 2020, the average daily price is higher than US$100.
For example, in a Christie’s auction that recently made NFT popular, the purely digital work “Everydays: The First 5000 Days” was sold for nearly $70 million. According to public reports, the winning bidder will receive a picture of “Everydays. The first 5000 days” and an NFT, which is based on blockchain technology and stores the metadata of the digital work, the original author’s signature, and ownership. History.
Although NFT is mixed in the collection world, there are many doubts from the outside world. After all, this sounds like the NFT fever that broke out during the epidemic and the tulip fever caused by the plague in the Netherlands in the 17th century. There are too many similarities. .
The more direct loophole is that in the field of collecting art where NFT is widely used, copyright loopholes are frequently mentioned by the outside world. “The non-original author claims to be the author of the work”, “the copy pretends to be the original work” and other issues lies in the fact that the current NFTs cannot prove their original provenance and copyright attribution.
In addition to the realization of “breaking the circle” NFT, the hottest game in the currency circle since 2020 is DeFi. According to the interpretation of peer customer data, DeFi refers to a decentralized smart contract financial platform, mainly