Editor's Note: This article comes fromView on the chain (ID: liansg01), Author: Hao Tian, reproduced by Odaily with authorization.
Editor's Note: This article comes from
View on the chain (ID: liansg01)
View on the chain (ID: liansg01)
, Author: Hao Tian, reproduced by Odaily with authorization.
Forgive me at the sad moment when the market crashed inexplicably and everyone generally suffered huge losses, and I used fierce headlines to block everyone.
On March 12, the digital asset market experienced a magnificent "halving market". However, the halving was not a halving of mining rewards but a halving of prices. The market did not go bullish as expected but fell directly into a bear market end.
On this day, Bitcoin fell below US$5,555 at the lowest level, and tens of billions of RMB were blown up on the entire network within 24 hours. The entire market was full of mourning and complaints.
"Hulala is like a building falling down, and it's dire like a lamp that is about to run out."
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However, before this deep drop, the market was actually filled with a strong "long" sentiment, because there are only two months left before the halving of Bitcoin mining rewards, and the global economy is also in crisis due to the impact of the new crown virus.Everyone was imperceptibly filled with a cognition by the market: After the reward is halved, the market will definitely rise sharply, and the safe-haven asset Bitcoin will definitely skyrocket under the economic crisis.”But is this really the case?
Obviously, the facts of blood tell us that such blind investment cognition is tantamount to digging our own grave.
In my last article "
Why Can’t You Be Blindly Optimistic About the Next Round of Bitcoin Halving”
As mentioned in the halving market, people will unconsciously produce too blind "psychological construction" expectations, including miners' hardware overload layout, unrestrained use of leveraged funds, etc.
In fact, in the past two months, based on several sets of market-related data, worrying things still happened.
1) According to news, since February, USDT has been out of stock, and Yangma Tether has not issued a large increase in USDT. Under the influence of long sentiment, most retail investors choose the "off-market allocation" loan method to enter the market. A number of exchanges have converted the USDT lending rate from daily interest rates to one-hour lending rates, which is equivalent to raising interest rates in disguise to adjust the market's new borrowing demand.
2) According to the news of the contract emperor, when the market rose this time, the range was small, and the amount of short liquidation was not too much, but when the market fell, the range was very large each time, and the bull market was full of blood. In the fall on March 8, the 24-hour contract market had a total liquidation of 569 million US dollars, and the number of people liquidated was 31,988. It is hard to imagine how many bulls were driven out of the market in today’s violent deep drop.
3) As of now, BTC's current network computing power is 115.001EH/s, and the mining difficulty is 16.55T. A large number of mining machines such as Antminer S9 series and Avalon A841 have reached the shutdown price. However, the computing power has continued to grow in the past two months, the overall investment of miners is increasing, and the profit expectations are relatively high.
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Obviously, the state of the market during this time is "crazy". Retail investors are waiting for an opportunity to ambush with leveraged funds, miners are still increasing their investment in mining machines, and many off-site novice users have also jumped in to try.
However, behind all these crazy "going long" emotions, there is no "assumption".
Assuming that the expected halving rally fails to come, the market will suffer a catastrophic backlash.
Who can guarantee that the assumption must be true? If the assumption is not true, who should pay for the investor's loss? So to some extent, it is not an exaggeration to say that the "halving market" is a cognitive "scam".
People in the circle like to talk about the halving market as a bull-bear transition point.
They probably think that the mining industry chain is in the upstream of the Bitcoin ecosystem and maintains the operation of the Bitcoin system. After the halving, under the condition that the cost of electricity and mining computing power remain unchanged, the profitability of miners’ mining will be greatly reduced and may even lose money. Once the miners encounter mining disasters or the profit rate cannot be guaranteed, the miners may lose money. Collectively, the entire Bitcoin system is at risk of downtime.
Therefore, in order to maintain the stability of the system, every time the mining reward is halved, the price rise is an inevitable trend.
But if you think about it carefully, this rising logic is not a sufficient condition for the rising fact:
1) The stock of the bitcoin market has exceeded 18 million, and there are only 3 million unmined bitcoins left, and it will take more than 80 years to mine, which means that the bitcoin market is already a secondary trading market for stock, and new production capacity will be added at the first level The impact on market conditions is minimal.
2) There is currently no clear anchor value standard for the price of Bitcoin. As the supply side, manufacturers of mining machines and mining pools have no pricing power over Bitcoin. The pricing power is actually in the hands of the hidden big dealers in the trading market.
3) Around the four major factors that affect miners' mining, such as mining machine price, computing power, mining difficulty, and electricity cost, there will always be a relatively dynamic and balanced market price. The price is low, there are few people mining, the computing power is small, and the difficulty of mining is also low. It is not the logic that the Bitcoin system will go down because the price has not risen as expected.
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To sum up, we found that the logic that the price will rise because of the halving of Bitcoin mining does not hold.
Bitcoin is a deflationary asset. After all 21 million coins are dug out, mining rewards will also bid farewell to the historical stage, and the impact of mining rewards on market prices will eventually tend to zero correlation.
Moreover, the mining industry chain has a relatively mature upstream and downstream market and price adjustment mechanism. Marketization controls everything. Even if the price does not rise enough to cause mining disasters, it is the result of objective market adjustment. There is no need for mining profits, so the currency price must rise reason.
Of course, if large-scale mining disasters lead to too little Bitcoin computing power, it may lead to concentration of computing power, and there is a possibility of being attacked by 51% double spending. From the perspective of security, the price of Bitcoin will not fall without a bottom line.
It is an indisputable fact that the digital asset market is controlled by market makers.
Taking the market price trend in the past month or so as an example, we found that when the market rose in this wave, it took three steps and one turn back, moving forward in small steps, but after rising to a certain height, it retreated in big steps. The result of this trend is that when it rises, it can hardly affect the short positions, but when it falls, the long positions will be mercilessly liquidated.
This means that this may be an in-depth strategy of the short-sellers to lure the bulls into a small crowd. It is to use the story of the halving market to induce the bulls into greed and madness, and then complete the harvest at one time.
The bears take advantage of the blind optimism of some retail investors towards the halving market to carry out technical harvesting.
Of course, what I said above is only for the contracted market. If everyone insists not to touch the contract, the problem will not be too big.
Speaking of this, many friends outside the circle will definitely say that the entire digital asset market is completely controlled by dealers, and it is a scam from the ground up. In this regard, I don't think so.
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It has taken 10 years for the price of Bitcoin to rise from a few cents at the beginning to about $10,000 now. During this period, there have been three or four major cycle fluctuations. There is already an initially mature regulatory market behind the price trend.
How far the price of bitcoin rises is the top, and when it falls is the bottom. In fact, there are certain supply and demand "market fundamentals" to support it.
Even if it is manipulated by the dealer, there will be ups and downs in a short period of time, and the skyrocketing and plummeting will only be harvested by gamblers who play contracts, and at most sacrifice some capital efficiency for ordinary retail investors who hold currency.
Therefore, I advise you not to stay away from the contract market, as the water is too deep and you really can't afford to gamble.
From a rational point of view, apart from the unreliable factor of mining halving, the digital asset market, like most financial markets, also has a potential market bull-bear conversion cycle.
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Factors affecting this conversion cycle include: the increase in user groups in the digital asset market, the advancement of hardware technology in the mining industry, the implementation of public chain ecological DApp applications, the integration of alliance links and traditional economies, and the recognition of Bitcoin as a safe-haven asset. Information, the influx of supporting forces such as off-site funds and talents, the compliance and licensing of government policies, and so on.
1) At present, there may only be 30-40 million bitcoin holders in the world, and the market value is about 10 million US dollars. Judging from the stock market users, the current market value is not too low. Only when there are tens of millions of incremental users appear, can a new round of growth in the Bitcoin market price be promoted. However, in the past ten years, users in the digital asset market have been attracted by the wealth effect. The current huge volatility has made most users on the sidelines lose the courage to enter the market, and it will not be possible to see a large number of new users in a short time. possible;
2) The public chain needs to rely on the DApp ecology to bring incremental users. At present, the public chain is all about the story of the protocol layer. It mainly tries to make some technological breakthroughs around the consensus mechanism, verification block efficiency, oracle solution, etc. The mountain that everyone wants to overcome is just the impossible triangle problem of the blockchain. But the problem is that the value of the protocol will eventually be implemented on the application, and the application can attract a large number of new users to enter the market and drive the market to prosper. The fact is that the status quo of public chains in spinach DApps is relatively bleak, and the potential in the DeFi field has not yet been tapped, and the road to public chains is long and long;
3) Bitcoin has always been regarded as a safe-haven asset along with gold. However, while the current political situation in the world is unstable, and global mainstream assets such as oil and stock markets have plummeted, Bitcoin does not have the same synchronous reaction as gold. towards a growing trend. On the contrary, the digital asset market has fallen more fiercely than the traditional financial market, which makes people even wonder if the only stock funds are also fleeing? In fact, whether Bitcoin can become a safe-haven asset has a certain relationship with its anti-government regulatory characteristics, but the direct reason is its price stability, especially its anti-fall characteristics. Unfortunately, Bitcoin has not yet reached the risk-averse perception of gold. high.
Although the above has criticized the real difficulties encountered by several digital asset markets, in fact, everyone understands that there is a breaking point behind these difficulties: the legal compliance of national government units.
Once there is a statutory license, Internet companies holding a lot of patents, eye-catching financial institutions, and a large number of technical talents and new entrepreneurial forces will pour in. It is very likely that the road traveled in the past 10 years will be completed in only two or three years Create another sunny day.
From the setting of the top-level design of 1024 countries last year to the layout of new digital infrastructure under the epidemic crisis this year, and even the continuous acceleration of the central bank’s launch of DCEP, it indicates that the compliance of digital assets is the general trend, and what the market is waiting for is nothing more than a clear policy signal .
