Bitcoin dominates, and altcoins are sluggish, how do we operate?

The characteristics of the market since this year are: BTC is alone, and altcoins are sluggish.

At the beginning of April this year, the entire digital currency market, which had been fluctuating downwards, finally ushered in a moderate market reversal, and the mainstream currencies all showed a good trend:

BTC rose from $3,500 to a maximum of nearly $13,000; Ethereum rose from $120 to a maximum of $330; BCH rose from $110 to a maximum of more than $400; EOS rose from $2.4 to a maximum of $8; BNB rose from $6 to a maximum Nearly $40...

In this reversal of the market, the mainstream currencies all had considerable gains, but many altcoins and the star currencies that emerged during the 2017 ICO frenzy almost completely stayed where they were, appearing sluggish.

It is worth noting that in this round of the market, although the increase of BTC is not the highest among mainstream currencies, the market value of BTC has risen in a straight line in the entire digital currency market, rising from 53% to the highest. More than 70%, and no matter whether the market goes up or down, the market value of BTC rarely falls by 60%.

What is the root cause of this situation?

In my opinion, the most fundamental reason is that since the ICO climax in 2017, there has been no major breakthrough in blockchain technology, and there has been no killer application like ICO. Therefore, the driving force of the market is not from the blockchain ecology but from the Driven by external funding.

Regardless of whether the external funds are for the purpose of avoiding risks or misappropriating money, the funds will choose currencies with high consensus, good security, good liquidity, and large volume.

Then BTC will undoubtedly become the first choice, and funds will concentrate on BTC, resulting in a situation where BTC is thriving no matter what the market is.

So how long will the situation of BTC with one flower alone last?

I think this is closely related to the development of blockchain technology,If there is no next killer application like ICIO, this situation is impossible to change in terms of the existing coins and various "micro-innovation" projects that seem to emerge, because none of them One can challenge the consensus formed by BTC in the industry, and none of them can bring new imagination to the industry.

So who or what application will break this situation in the future?

Either there will be new projects like Ethereum, subverting the existing digital currency architecture from the underlying structure and technology; or new applications will emerge based on the existing technical framework.

The core element of Ethereum’s subversion of BTC back then was to transform the scripting system of BTC, invent the Ethereum virtual machine, improve the functions of BTC, support Turing’s complete smart contracts, and enable blockchain technology to be used to handle complex transactions. business logic.

The emergence of Ethereum has affected a whole generation of blockchain technology. Whether it is EOS, ZIL or the later big stars Algorand and Conflux, they have not escaped the smart contract framework of Ethereum. No matter how they are improved, they are only "micro-innovations". Instead of subverting Ethereum fundamentally.

So far, no project has been found that has the potential to subvert Ethereum in terms of architecture.

When we turn our attention to the application layer, we think that the field that may become the next killer application may be Defi (decentralized finance).

At present, the Defi ecosystem on Ethereum is already very prosperous, and various new projects are still emerging and emerging. However, all these Defi projects are unable to achieve ideal performance due to the limitations of Ethereum itself in terms of technology and contract standards.

The only hope for a fundamental change in all this is Ethereum 2.0.

Judging from the current progress, technical framework and conception of Ethereum 2.0, it is very likely to solve its problems in TPS, consensus mechanism, etc., and to upgrade Ethereum to a new level in an all-round way, becoming a brand new and more powerful "world". computer".

According to the planning of the Ethereum team, the full completion and launch of Ethereum 2.0 will probably be in 2022, and if it is conservatively estimated, it may go to 2023.

Therefore, I boldly predict: before 2022 and 2023, that is, if Ethereum 2.0 is not online, the overall situation of digital currency will not change for a day.

In these 3 or 4 years, regardless of whether the overall digital currency market is bullish or bearish, the situation that BTC is the only one will not change. Even in the bull market, it is conservatively estimated that the market value of BTC will be more than 50%.

So what's the advice for investors?

According to my analysis and judgment, in the three or four years before the launch of Ethereum 2.0, our investment strategy was simple and boring: that is to hold on to mainstream currencies led by BTC and Ethereum, and the proportion of funds in mainstream currencies should be at least More than 50% of the total investment, or even simpler and more direct, can account for 80%, and the remaining funds will be reinvested in projects that you are optimistic about and willing to take risks.