The structural opportunity "gray cow" has arrived. Is it too late to get on the bus now?

 This bull market will be very different.

In the early morning of November 18, 2020, Bitcoin broke through 17,500 USDT, setting a new high since December 21, 2017. Interestingly, in the entire history of Bitcoin, the time for the price to exceed 17,500 USDT was only 7 days.

In order to better summarize and summarize the structural transition under Bitcoin's periodicity, Odaily Planet Daily judged this round of rise as the early stage of "gray bull".

What is the difference between "Gray Bull" and the previous bull market? Who is behind the "Gray Cow"? What is it that makes this year's Bitcoin more popular than gold ETFs? Is Bitcoin currently high? Will there be a sharp retracement like in 2017? This article will answer these questions one by one.

A big gray bull is coming towards us

In ancient Western civilization, the bull represented strength, wealth and hope, while the bear represented restraining fanaticism, digesting oneself, and rebirth. As early as the 18th century, West Convenience chose the two species "bull" and "bear" to express the market's ups and downs.

From 2017 to 2020, there have been three "bulls" and two "bears" in the crypto market. Of these three cows, one is very big, the other is very empty, and the other has its horns; the two bears, one is "Big Bear" and the other is "Bear Two".

2017, Bitcoin rose from $ 735.3 198 91 Mei Yuan, cow feed because 1CO grew up, we call it a "ICO cow."

In 2018, Bitcoin almost used up its full-year retracement, which was a year of "bears".

In 2019, the rise of contract trading has accelerated the rise and fall of Bitcoin, which we call the "contract bull".

Looking back at history, the "contract bull" is still empty, and "Xiong Er" is not too strenuous to fight it back.

Beginning in March 2020, Bitcoin has risen from the lowest point of about $4,000, and has risen all the way to over $16,000, and it has become more aggressive. As the horns were first revealed and "Xiong San" hid his figure, we gradually saw the outline of this cow-the gray cow.

Why is this bull market a "gray bull"?

Grayscale currently manages $10 billion worth of cryptocurrency. Among them, Grayscale Bitcoin Trust (GBTC) was founded in 2013 and is the company's largest trust. Grayscale purchased 15,114 Bitcoins (approximately US$241 million) in the last week alone. As of November 15th, Eastern Time, Grayscale Bitcoin Trust's total holdings have reached 509,581 BTC.

The Odaily Planet Daily reported the relationship between the increase in GBTC holdings and the price of BTC from October 19 to November 16.

As can be seen from the above figure, as time goes by, the gray-scale buying volume presents a continuous enlargement trend.

At the same time, from the technical chart, after BTC broke through $12,000, the higher the attack, the greater the resistance, but it still maintained a healthy upward trend.

Combining with the above grayscale accumulation chart, it can be seen that grayscale played a big role in BTC's upswing (huge buying power). The more sell-offs above, the larger the grayscale accumulation.

Extending the timeline a bit, macro investor Dan Tapiero said that the share of bitcoins purchased by Grayscale Trust accounted for the share of bitcoins generated by mining, which increased from 27% in Q1 to 77% in Q3.

On October 14, Grayscale stated in its financial report for the third quarter of 2020 that the inflow of funds for all of the company's products was US$1.05 billion. So far this year, this figure is US$2.4 billion, which is more than twice the total amount raised in 2013-2019. Grayscale Bitcoin Trust's inflow of funds in the third quarter was $719.3 million, and total Bitcoin asset management (AUM) increased by 147% in 2020.

It can be seen that this round of rise compared with the previous several times, the biggest variable is the large-scale buying of gray, which increases the demand for the market, solidly "builds the bottom", and holds the "selling pressure."

In addition, we also discovered another difference between Grayscale and "previous" investors.

Dare to buy if you dare to fall, "Gray Bull" is not "fear of heights"

Grayscale's investment style is a bit special: As long as Bitcoin dared to fall, Grayscale would dare to buy, and there was no trace of "fear of heights." This is clear from the technical drawing.

At the end of 2017, Bitcoin rose sharply, but the higher the price of the currency, the greater the volatility, and the BTC stayed at the high position for a short time, which could not be stabilized at all, which can reflect the FOMO mood.

Compared with the trend of BTC's high in 2020, BTC can be said to be a "small step" all the way up. As long as there is a big selling pressure, the bottom will take over. This makes the overall volatility of the current high of BTC much lower than in 2017, and the trend is relatively More stable.

As for the wave of "contract bulls" in 2019, because the trend was very weak, they didn't stand up to $14,000, so nothing to mention.

These are just "phenomena" summed up from the disk.

The main force of the bull market is different: from retail investors to institutions

The reason why this round of bull market behaves differently is mainly because the "gray bull" has changed from the main driving force of the previous bull market. Grayscale itself is a trust company. It mainly earns management fees for trust products. It does not specialize in "money speculation". The main buyers behind it are not ordinary large investors. It can be seen from the grayscale financial report that the "Grayscale Bull" is the result of real money pushing up, not manipulation. So, who is so rich?

According to the data disclosed by Grayscale in the third quarter of 2020, the purchase users of Grayscale's products are mainly institutional investors (81%), followed by qualified investors and family offices (8% each). 57% of purchase users are from outside the United States.

As of November 9, 2020, according to publicly disclosed information, a total of 23 companies (a total of 29 institutional-level accounts) hold Grayscale Bitcoin trust shares, with a total of 59,553,200 trust shares held, accounting for Grayscale Bitcoin 11.5% of the issued share of the trust (Note: The statistical caliber is the information disclosed by the institution in the US SEC. The share of trust held by the institution may change in different reporting periods. The statistics in this article are still holding trusts as of November 9, 2020 Share of institutions). The 23 companies include crypto asset lending companies, hedge funds, mutual funds, private wealth companies, consulting companies, family offices, etc.

Data source: Chain Hill Capital

It can be seen from these data that the main buyers of Grayscale are institutional investors, and “Grayscale Bull” is essentially an institutional bull. The previous bull market was dominated by retail investors and major currency players in the carnival, and institutional funds were not dominant. Since the beginning of this year, the inflow of institutional funds has been extremely rapid, and the leading role has been obvious. The strategic position of the institution also explains to a certain extent the "panel appearance" mentioned above-this time the rise has become more stable.

In addition, after the main force of the bull market has changed, the rhythm of the bull market has also changed a lot.

There were obvious signs of manipulation and hype by big players before, which caused the market to have a phenomenon of alternate rises. It was roughly that Bitcoin finished the rise of mainstream currencies, and then altcoins made up for the rise, followed by a major correction. But now institutional investors are generally value investors, who mainly invest in Bitcoin and a few other mainstream currencies, so the rotation market is very weak this year. However, we are also concerned about the recent surge in DeFi leaders. Because these DeFi projects have their own value, the recent rise is more of the return of value after the previous oversold.

Pushing hands more macro than institutions: a great transfer of world wealth

We believe that institutional investors will continue to enter the crypto market because the world is undergoing a wealth transfer. Especially this year's new crown epidemic and large amounts of water released by the central banks of major countries have also promoted such a wealth transfer . The following is a brief overview mainly from two dimensions.

• The wealth in the hands of the older generation began to transfer to the hands of the younger generation. Grayscale stated in the report "Wealth Transfer Promotes BTC to Become a Mainstream Investment Target" , although Bitcoin was only a niche asset that attracted a few investors in the early stage, it is now becoming more and more accepted by mainstream investors. . The survey data shows that in 2019, the number of potential investors in the Bitcoin market is about 21 million, but in 2020 it has grown to 32 million. In 2019, 53% of investors said they were “familiar” with Bitcoin, but this has increased to 62% in 2020. More than 50% of respondents predict that digital currency will become mainstream before 2030. Although most Bitcoin investors currently do not have much income, 68 trillion US dollars of wealth will be transferred to the younger generation who tend to invest in digital currencies in the next 25 years.

  Nick Panigirtzoglou, a market quantitative analyst at JPMorgan, believes that "Over time, millennials will become the most important part of the investment world, so Bitcoin and gold will Intense competition is good for Bitcoin's long-term upward trend. From a technical point of view, Bitcoin's market value should increase by at least 10 times in order to match the gold market based on physical gold bars and coins."

• Traditional institutional investors began to transfer traditional assets to digital assets. The fundamental reason for institutional investors' strategic holding of GBTC is that institutional investors recognize that the digital age has arrived and is irreversible, more and more people will turn to digital assets, and human wealth is undergoing a major migration. On November 9, JPMorgan Chase pointed out in a report that Bitcoin is eroding market demand for gold ETFs. Nowadays, institutional investors such as family offices regard Bitcoin as a digital alternative to gold, and their demand for Grayscale's Bitcoin trust exceeds the sum of all gold ETFs.

  

This view is also supported by data: in the process of entering traditional institutions, BTC chips have also been loosened at a high level and have been constantly shifting.

According to BTCparser monitoring, on November 7, 1,000 BTC mined in 2010 were transferred, and on October 3 this year, 50 BTC mined in 2010 were transferred for the first time. The figure below shows the transfer of BTC chips from a larger period.

BTC chip transfer graph over the past ten years

Why is it said that this round of "Gray Bull" will be Long Bull and Slow Bull?

So far, we have basically explained the cause of the original bull market and the differences from the past few times. Of course, for the majority of investors, what is more concerned is whether it is too late to get on the bus now? How long will the gray cow last?

Let me start with the conclusion, we believe that it is still in the early stage of "Gray Bull". There are two reasons:

• The relationship between Grayscale and institutional investors: The compliance of Grayscale Trust products provides more and more restricted institutional investors with channels to buy BTC. In January of this year, Grayscale Bitcoin Trust was approved as the first digital asset tool that meets the standards of the US Securities and Exchange Commission. On October 12, the application for registration of Grayscale Ethereum Trust was officially approved. The compliance of Grayscale Trust products is one of the important incentives to attract institutional investors to enter this year, and this trend will accelerate in the future. As mentioned above, behind the continued purchase of grayscale bitcoin trust products by institutional investors is an irreversible wealth transfer.

  (Odaily Planet Daily Note: In the United States, some institutional investors with investment restrictions cannot enter the cryptocurrency exchange to buy BTC in the name of an institution. They can only purchase bitcoin through trust channels. In addition, institutional investors are more accustomed to trust this A traditional investment method.)

• The principle and mechanism of Grayscale Trust products: The design of Grayscale Bitcoin Trust makes it difficult to sell BTC, and its position planning is more inclined to long-term holding. Institutional investors will get gray-scale GBTC after buying gray-scale Bitcoin. Investors can exchange BTC for GBTC (with half a year to unlock), but cannot exchange GTBC for BTC. Grayscale Bitcoin Trust currently does not have any redemption plan. The trust can seek regulatory approval to implement the redemption plan. This means that neither Grayscale nor institutional investors are likely to directly sell the BTC spot market through the GBTC held in their hands.

Overall, institutional investors are still entering in large numbers, and the possibility of BTC hitting the market by a large margin is relatively low. With huge institutional funds flowing to a limited-scale currency circle, this bull market is bound to emerge from the long and slow bull market.

The "big money" transactions behind Bitcoin's surge

 Behind Bitcoin's price rise again, this controversial cryptocurrency is attracting new institutional funds.

Statistics show that the open positions of large institutional holders in bitcoin futures contracts have reached the highest level in history.

Bitcoin broke through the $17,500 mark on November 17 (Tuesday), approaching its historical high. (Editor's note: Bitcoin rose above US$18,000 on Wednesday afternoon, the first time since December 2017 to reach this high level. As of press time, the price has fallen below US$18,000.)

As the "big money" begins to flood in, this cryptocurrency is benefiting, and regulators have tacitly (if not very formally) recognized Bitcoin as an acceptable asset class. It is up 147% this year and has shown particularly strong momentum in the past few weeks. Bitcoin's all-time high is $19,783. It reached this level in December 2017 and fell sharply in the following months.

Although Bitcoin is still used for things that once disgusted investors — such as ransomware attacks against institutions — it has also been increasingly accepted by some investors as a hedge against the US dollar. Some people expect that the Fed's decision to keep interest rates low will stimulate inflation, and they believe that Bitcoin can withstand this depreciation. The supply of Bitcoin is capped at 21 million, so supporters believe that it will not depreciate in the same way. Hedge fund investor Stanley Druckenmiller (Stanley Druckenmiller) said earlier this month that he holds a "very small amount" of bitcoin because he expects the dollar to depreciate.

"I hold many, many times more gold than I hold Bitcoin, but frankly speaking, if gold investment works, Bitcoin investment may be better because it has smaller trading volume and less liquidity. There are more beta gains." Druckenmiller said on CNBC.

Concerns about inflation have become a standard explanation for the rise of Bitcoin, although there are some factors that complicate this statement. On the one hand, Ethereum, the second largest cryptocurrency by market capitalization, is also in a bull market, and its supply has no upper limit. And, in the past few years, fear of inflation has not been the first time. Investors often complain that the Fed is "printing money." During this period, Bitcoin sometimes rose and sometimes fell.

Right now, the regulation of cryptocurrencies is fragmented, with some things being handled by state governments, and some by different federal agencies. But in recent months, most of the regulatory decisions have been positive for cryptocurrencies.

Online payment company PayPal Holdings (PYPL) said last month that it had obtained a special license from the New York State Department of Financial Services as part of a plan to allow users to trade bitcoin.

Although Trump stated that he "dislikes" Bitcoin and the US Securities Regulatory Commission has also cracked down on alleged fraud by some cryptocurrency companies, institutions such as the US Commodity Futures Trading Commission have opened the door to various cryptocurrency services such as asset custody. . This kind of basically friendly regulation may continue. Edward Moya, an analyst at currency broker OANDA, pointed out that Gary Gensler, one of President-elect Biden 's senior advisers to financial regulation, "is considered to be friendly to cryptocurrencies."

Bitcoin has also been accepted by more companies-such as payment company Square-and has attracted new institutional funding. Statistics from the Chicago Mercantile Exchange (CME), which provides bitcoin futures, show that trading volumes have soared in recent weeks. The Chicago Mercantile Exchange told Barron’s that the open positions of large institutional holders in bitcoin futures contracts reached an all-time high. Compared with October, this month’s average daily transaction volume has increased by 7% to 7,900 contracts.

Nevertheless, Bitcoin is still being questioned. As prices continue to rise, well-known hedge fund investor Ray Dalio expressed his skepticism on Tuesday.

Dalio wrote on Twitter that considering the volatility of Bitcoin and the fact that you can't buy a lot of things with it, it is neither a good medium of exchange nor a good store of value. Even if governments have not tried to stop it so far, “if it succeeds enough to compete with currencies controlled by governments and pose a sufficient threat to government currencies, then governments will declare it illegal and make it illegal. Too dangerous to use."

"In addition, unlike gold, which is the third largest reserve asset held by central banks, I cannot imagine that central banks, large institutional investors, corporations or multinational corporations will use Bitcoin."

Nevertheless, he made it clear that he is willing to reconsider his position. "If my judgment on these things is wrong, I am happy to be corrected." he wrote.

*For the English version, see the report "Matthew C. Klein Divided Government May Push the Fed to Go Bigger. Here's What That Might Look Like." on November 17, 2020.

*The content of this article is for reference only. Investment advice does not represent the inclination of "Barron Weekly"; the market is risky and investment must be cautious.

Demystify the economics behind the bull-bear conversion, teach you when to buy the bottom / escape the top Bitcoin

 There are invisible hands behind BTC manipulating bull and bear.

Will the U.S. election really push Bitcoin up? Is it a historical law or a coincidence? With the reduction of block rewards for miners, can the "halving bull market" still stand? What are the economic principles behind the four-year halving of Bitcoin? The market changes in bulls and bears, how can we use these laws to escape the top and the bottom? This article will take you to interpret the invisible hands behind Bitcoin from an economic perspective.

Speaking from the "bull market" of the US election

Ryan Watkins, an analyst at the research institute Messari, believes that the previous U.S. elections will push the price of Bitcoin to rise. Watkins marked the Bitcoin trend chart after Obama and Trump came to power in the picture. Looking at the picture alone, this inference seems to be correct. However, relying on the trends after only two elections to summarize the laws is hardly sufficient evidence. Even if it is reasonable and relevant, why would the US election affect Bitcoin? After all, from the perspective of the entire financial market, Bitcoin is still very niche, and the relevance of US policy to Bitcoin is actually very weak (and difficult to prove). However, there is really a "coincidence" between the previous US elections and the trend of Bitcoin, and there is an interesting correlation.

Is "halving the bull market" still reliable?

Before revealing the answer, let's take a look at a long-term Bitcoin halving bull market chart. Since the birth of Bitcoin, it has experienced three halvings, namely: the first halving (2012.11.18), the second halving (2016.07.09), and the third halving (2020.05.13). Before and after the first two halvings (when blue turns red), a "halving bull market" occurred.

Among the supporters of the "halving bull market" view, the domestic representative is Lebit mining pool Jiang Zhuoer. He believes that the long-term net supply of Bitcoin is only the output of miners, and the net demand is the demand for the purchase of coins by newcomers who are constantly entering the market. When the demand does not change suddenly, the supply will halve instantly, which will inevitably lead to an increase in the price, and then it may The formation of the "news ↔ bull market effect", the positive cycle continues to attract newcomers and new funds to enter the market. At the end of a bull market, when the market sentiment is frenzied and the bubble is serious, and the short-term currency price increase exceeds the speed of newcomers and new funds entering the market, the bubble of the bull market will burst and the bear market will begin. The design of Bitcoin's output halving every 4 years makes the "bull bear cycle" and the "halving cycle" resonate.

It can be seen that the important theoretical basis of the "halving bull market" is: when demand does not change suddenly, supply is halved instantly, which will inevitably lead to an increase in prices. Is this theory still valid after this round of Bitcoin halving?

Let's look at the supply and demand of Bitcoin after the next three halvings. From the perspective of the supply side, the block reward of Bitcoin has changed from 50 BTC per ten minutes to 6.25 BTC now, which means that the original miner selling pressure (calculated by the number of coins) has become 1/8 of the previous one. Of the 21 million bitcoins, about 18.538 million have been dug up; from the demand side, the number of coin holder addresses can more accurately reflect the overall change in the current number of bitcoin holders, and it was halved for the first time The number of coin-holding addresses at the time was 996,506. At the third halving, the number of coin-holding addresses was 30247715, and the number of coin-holding addresses increased by about 30.4 times. From the observation of the changes in the number of new Bitcoin addresses, it can also be seen that the number of new users has indeed increased in different orders, and it is still in a state of continuous rapid growth.

It can be seen from the data that the supply and demand forces of the Bitcoin network have undergone obvious asymmetric changes. The net supply force caused by the halving is getting weaker and weaker, and the growth of the demand side is getting stronger. Even if estimated by conservative data, the growth rate of the demand side is much greater than that The declining speed of net supply and the rise in the price of Bitcoin are more of a result of growth on the demand side. It can be seen from the number of coin-holding addresses and the number of new addresses that the obvious growth of the two is not affected by the "halving bull market", but has inherent logic and rhythm.

In the first two halvings, the ecology of the Bitcoin network is relatively simple, mainly miners, and the market selling pressure also mainly comes from the mining income of miners. When the block reward is halved, the mining income of miners will suddenly decrease. This will indeed have a greater impact on the price of the currency and make people feel like a "halving bull market". This is also the main basis for this theory.

With the reduction of block rewards, the motivation of miners to maintain the network will shift from relying on block rewards to relying more on fee income. (Odaily Planet Daily Note: In the Bitcoin network, the income of miners is mainly divided into two parts, one part is block rewards, and the other part is fee income for processing transfer transactions.) The change in the main source of miners' income implies Bitcoin The economic relations in the network are undergoing profound and complex changes. Miners have gradually changed from the role of "currency" distributors to the role of network service providers. This shift will further prove that the "halving of the net Bitcoin supply has spawned a bull market" gradually becoming less effective.

As a large number of bitcoins are mined, the theory of "halving the bull market" will gradually become a "historical illusion."

Although the basis for the "halving bull market" has weakened, the phenomenon still exists. This is mainly due to the economic principles behind the Bitcoin network.

The invisible hands behind Bitcoin

At the beginning, we introduced that there is a very interesting relationship between the US election and Bitcoin. In fact, this relationship is a four-year cycle. Bitcoin halves every 4 years, and the US election is every 4 years. This design is not accidental, but in line with the capitalist economic cycle. This is like a bull and bear with invisible hands manipulating the market.

The short capitalist economic cycle (also known as the Kitchin cycle) is only 3-5 years. The American economist Kitchin believes that the development of the capitalist economy will regularly fluctuate up and down every 40 months. The economist Schumpeter uses this short cycle as a method to analyze the capitalist economic cycle, and uses the cycle changes of inventory investment and the small fluctuations in innovation (especially the changes in equipment that can be produced quickly). Explain the Kitchin cycle. He also believes that 3 Kitchin cycles constitute a Jugala cycle, and 18 Kitchin cycles constitute a Kondratiev cycle.

After three production cuts, Bitcoin not only entered a small cycle again, but also at the beginning of the second mid-cycle.

(Odaily Planet Daily Note: I need to explain here that we consider Bitcoin as a commodity to discuss, and we believe that it has certain currency-like attributes. The reason for this assumption is that its high volatility is not suitable As a currency; in addition, from the current demand side, it is more traded and stored as a commodity or investment product. Although it involves a part of payment, the currency attribute is still not the main growth demand at present. In this assumption Under the circumstances, Bitcoin is more of a commodity attribute, and miners are production and service providers, that is, the supply side.)

The internal basis of the Kitchin cycle is that the demand shock of commodities is passive and external, while the supply adjustment is active and internal. Therefore, the different changes in demand and supply (inventory) form four cyclical stages: passive Inventory, active restocking, passive restocking and active destocking. In the bull-bear conversion process of Bitcoin, these four cyclical phases are also in line.

• When the market demand for Bitcoin increases, the price begins to rise, and the increase in mining profits stimulates the influx of more miners, and the miners’ inventory is too late to respond, so sales increase and passively destock.

• The Bitcoin market demand has expanded significantly, the price has risen significantly, and the mining revenue has become more lucrative. Miners are expected to start to actively increase their inventory.

• Bitcoin market demand has begun to weaken, prices have stagnated and fallen, mining profits have fallen, miners have no time to shrink production, and sales have fallen, leading to passive increases in inventory.

• Bitcoin market demand has further shrunk, prices have fallen, and mining profits have further reduced. Miners expect negative expectations and actively reduce inventories.

How to use the inventory cycle to judge the Bitcoin bull-bear cycle?

To put it simply, when miners sell at discounts and miners sell mining machines in the market, it actually means that the bear market has basically bottomed out; when mining machine manufacturers are producing mining machines at full capacity, the mining machines on the market There is still a great demand, and the payback period of mainstream mining machines has been greatly shortened. In fact, it may be very close to peaking.

Specifically, we can observe the peak signal of the bull market of Bitcoin by calculating the static return days of the mining machine (the price of the mining machine divided by the net income per day), and the signal of the bottom of the bear market can be observed by the difficulty of mining. In addition, we can also use the proportion of mining electrical and mechanical expenses to judge the bull-bear transition.

Regarding the peak index, Jiang Zhuoer once proposed a mining machine bubble index, which judges the bull market peak signal by calculating the static return days of the mining machine. The inherent logic of the index is that if the speed of industrialized production of mining machines is far behind the rate of increase in currency prices, it means that currency prices are rising too fast to be sustainable. It uses S9 as an example to introduce this important indicator. As shown below:

In the figure, 2016 and 2017 during the bull, S9 back to the static stability at 200 cycles to 250 days, every day Lee Run stable at $ 5. However, in December 2017, S9's payback cycle quickly dropped to around 100 days, and its daily profit soared from 5 yuan to 20 yuan, which showed a clear peak signal.

The mining difficulty zone proposed by Willy Woo is composed of a set of different periods of Bitcoin mining difficulty polylines, which is a good visual indicator of bottoming out. The theory believes that when miners dig bitcoin, they need to sell some of the coins to pay for electricity and other costs. However, as the price of the currency continues to fall, some miners will choose to shut down when they cannot afford to pay, and finally leave the most powerful one Some miners continue to mine. As the miners shut down, the computing power and mining difficulty of the Bitcoin network will decrease, and the difficulty band will shrink, and when they converge, there will be a better bottoming buy indicator.

In addition to the above indicators, it is also possible to judge the peak and bottom market by observing the proportion of electricity bills of mainstream mining machines. The proportion of electricity bills represents the most important electricity bill of miners. When the proportion of electricity bills is too high, part of the mining machines will have the strongest computing power in the market, which means that the market has entered the bottom; The currency price continues to rise, more mining machines on the market have begun to enter the mining mode, and the proportion of electricity costs has dropped significantly, which means that the market bubble is serious.

Where does Bitcoin's market demand come from

Digital migration is the demand of our age. The development of blockchain technology follows the same trend. Bitcoin network is the first successful application based on blockchain technology. With the development of blockchain technology, the market demand of Bitcoin Will continue to expand.

This year, central banks of various countries released a large amount of water during the new crown epidemic, making the already risky traditional financial system even more precarious. As the impact of the epidemic accelerates in the digital age, central banks are stepping up the development of their own digital currencies and trying to form a new digital financial payment system. However, the most successful, safe and time-tested digital currency is still Bitcoin. Financial tycoon JP Morgan Chase pointed out in a recent report that institutional investors such as family wealth management funds have begun to regard Bitcoin as a digital alternative to gold. In the future, the market demand for Bitcoin is still very large.

On the other hand, under the DeFi boom, the total number of bitcoins currently anchored on Ethereum is about 150,880, which is developing extremely fast. Bitcoin is constantly being given new value in more and more DeFi. Its essence is a wealth migration in which technology drives financial innovation, financial innovation generates market demand, and demand pushes up prices. With the gradual construction and improvement of the blockchain infrastructure this year, more blockchain applications will begin to explode, and the demand and value of Bitcoin will also experience greater growth.