Bitcoin will start a voyage like the sea of stars
This recent adjustment really came and went quickly. In less than a week, Bitcoin and Ethereum got rid of the decline and set sail again.
At 22:53 on November 30, Beijing time, the price of Bitcoin on Bitstamp has exceeded $19,800, surpassing the peak of the bull market in 2017. Although it didn't take long for Bitcoin to retreat, the significance is extraordinary.
Next, I believe that even if there is another callback, the magnitude of the callback will not be too large. I hope that in this wave of small corrections, you will not lose your precious chips because of a small profit to make a swing.
Raoul Pal, a former Goldman Sachs executive, recently tweeted: "I'm going to drop a bomb today, tomorrow I have a big sell order, sell all my gold, and expand the purchase of Bitcoin and Ethereum according to the ratio of 80/20 .any of our other investments except for some traded bonds and some dollar bonds. it's true what i say i'm a macro guy and i know i've seen the best bets and i can take that risk .But ordinary people should not emulate me, or use my example, you should do it yourself and make investment decisions accordingly."
The subtext of this passage, in my opinion, is the key point:The potential of gold is far less than that of Bitcoin.
If we connect this passage with institutional investors’ aggressive buying of Bitcoin this year and the external macro environment, on the one hand, we can intuitively feel that Bitcoin buyers are undergoing structural changes;On the other hand, if we think further, we will find that the Bitcoin consensus is fermenting.
This will fundamentally change people's perception of the value of Bitcoin and completely reshape the price system of Bitcoin.
2020 is full of twists and turns and "see you soon". In the macro field this year, the biggest event was the global economic contraction caused by the outbreak of the new crown epidemic. In response to this sudden disaster, most countries led by the United States once again restarted the unprecedented "money printing to save the market" action.
We all know that gold has always been regarded by investors as a killer weapon against inflation and money printing. Therefore, in the past history, in the face of large-scale money printing by the government, institutional investors, the main force in the investment market, would buy gold frantically. Institutional investors have also bought gold this year, but unlike in the past, they have also set their sights on Bitcoin.
The reason why they have undergone such a change in investment behavior is that the fundamental logic of the former Goldman Sachs executive’s metaphor is that the charm and potential of Bitcoin is catching up with and possibly surpassing gold.
Driven by this logic, institutional investors treat Bitcoin like a group of sharks that smell blood and find their prey—and start hunting Bitcoin frantically. So we saw that Grayscale Capital and MicroStrategy were completely unafraid of Bitcoin's continued rise after breaking through $10,000, and they still bought without thinking.
Therefore, if this round of the market develops into a big bull market, it will be due to the change in the attitude of institutional investors and the large-scale entry into the institutional bull market.
So far, the consensus on Bitcoin has been sublimated to the second stage, that is, from the first stage of spreading from small circle of hackers to retail investors to the second stage——from retail investors to institutions investor.
As for whether the current round of market conditions will promote this sublimation to the third stage - from institutional investors to governments of various countries, although there are sporadic cases, the scale effect has not yet been seen, so it is too early to say at this time morning. But I believe that day will come eventually.
If we continue to follow this logic, we will find that the price system of Bitcoin will be completely reshaped.
If more and more institutional investors believe that the value of Bitcoin will catch up with and exceed that of gold, then their standard for measuring the price of Bitcoin must be to compare the market value of Bitcoin with the market value of gold.
So what is the market value of gold now? As of August 17, 2020, the total market value of gold is estimated to be approximately US$9 trillion.
If the market value of Bitcoin is to catch up with gold, the converted price of each coin is 428,000 US dollars.
I think this price is not a fantasy, but it is possible to achieve it. Even if we are more conservative, instead of using 420,000 US dollars, only 200,000 US dollars, this is a small fortune for many Bitcoin holders.
If we look back at the timing of institutional investors' large-scale entry this year, we will find that almost all institutional investors entered the market to buy Bitcoin at a price above $10,000. The price paid by the former Goldman Sachs executive mentioned earlier was close to $20,000. So $10,000-20,000 is the cost for institutional investors.
Therefore, the $10,000 bitcoin may be gone forever. I even think that in the next round of bear market, the lowest price of Bitcoin can fall below $10,000.
Based on the above speculation, I suggest that investors try to do two things in this round of market:
1. If God-given opportunity, Bitcoin falls to $10,000 or below, buy boldly.
2. If the price of Bitcoin in this round of market does not reach 200,000 US dollars, then we should not sell all of them anyway. We must keep at least one-third of the Bitcoin in our hands and hold it firmly.
Bitcoin is about to start a voyage like the stars and the sea.
