Listed companies have entered Bitcoin and Ethereum one after another. How long can this bull market last?
Editor's Note: This article comes fromVernacular Blockchain (ID: hellobtc), reprinted by Odaily with authorization.
Editor's Note: This article comes from
Vernacular Blockchain (ID: hellobtc)
, reprinted by Odaily with authorization.
The first anniversary of 3.12 is approaching. Compared with the "slump day" recorded in history last year, the current market is really "two days of ice and fire". Two days ago, the community was still joking: "I won't be fooled by 312 again this year."In fact, we are very clear in our hearts that the reason for our confidence is that the bitcoin and encryption markets this year are very different from previous years, because Wall Street institutions and listed companies that we could only imagine before have really come. Then the market will continue to expand like this, and will this round of bull market continue?secondary title
Will the institutional layout be "infected"?
As early as August last year, when DeFi was in a small bull market and the market began to fluctuate, the vernacular blockchain issued an article "
The similarities and differences between this round of bull market and the previous round may indicate the next move of the market
Looking back now, almost all of these seven major directions have been hit in the past six months without exception: DeFi continuation, NFT, Layer2, CEX making troubles, ETH itself, Polkadot, and the bull market.
Why do institutions, especially listed companies, enter the market one after another? Or because of the virtuous circle brought about by the bull market, many institutions saw that the institutions that entered the market first tasted the sweetness, and followed suit.
Now there is a consensus that the last round of bull market was "retail bulls", and this round of bull market is more inclined to "institutional bulls", which is different from whether the market is dominated by "retail investors" or "institutions".
The biggest difference between retail investors and institutions is that institutions pay more attention to "certainty". Perhaps it is because of the anti-inflation demand under the background of the global "big flood" that the adoption of Bitcoin continues to expand, and the DeFi boom on Ethereum continues to drive. Let institutions see the future of Bitcoin and cryptocurrencies.
In addition to the different logic of the two rounds of bull markets, there is actually another big reason.
Why do institutions, especially listed companies, enter the market one after another? Or because of the virtuous circle brought about by the bull market, many institutions saw that the institutions that entered the market first tasted the sweetness, and followed suit.
Especially after Tesla, the electric vehicle leader of Musk, the "richest man on earth", suddenly announced a large-scale allocation of Bitcoin as the company's asset reserve, the mentality of global capital has entered a subtle change.
Simply put, listed companies began to include Bitcoin and other encrypted assets as part of their asset allocation because they saw their future.
As Meitu, a listed company that recently announced the allocation of Bitcoin and Ethereum, said in its announcement, it has seen the future of encrypted assets and is ready to enter this technology field in advance.
Of course, listed companies are quite rational, and not all companies will participate, depending on whether conditions permit, just as people’s consensus cannot fully reach a consensus to accept things like Bitcoin.
Companies and institutions are also composed of these different individuals and represent their will. In any case, the intervention of listed companies has created a precedent for the large-scale adoption of Bitcoin and brought more confidence to the market.
secondary title
How long can this bull market last?
Whether it is a project or a market, many things are like this. It is often easy to catch fire, but it is difficult to sustain it. Therefore, when the market sentiment is getting more and more greedy, many rational people have already begun to prepare to leave the market, and are already thinking: When will this round of bull market last?
It is impossible to accurately predict the market. As before, we can preliminarily judge the market trend from some logical perspectives.
1. How long can the "big water release" last?
The large-scale adoption of Bitcoin is largely due to the global "water release". Therefore, most of the inflow of encrypted assets enters Bitcoin, while Ethereum and DeFi on the Ethereum ecosystem overflow after a large amount of funds enter Bitcoin. Therefore, how long the "big water release" can last is a very important factor for the market.
Recently, everyone has paid attention to Biden's 1.9 trillion US dollars. After the anti-epidemic relief bill was passed by the House of Representatives, it was passed by the Senate yesterday, so Bitcoin has risen again. The release of water by the United States means that it will "suck blood" around the world as usual, and it is also predictable that countries will continue to "release water" one after another.
This is not a short-term thing, the economic recovery will be quite slow. Some economists have previously inferred that in the optimistic case, the United States will start raising interest rates as early as September 2021, in the neutral case, it will start to raise interest rates in June 2022, and in the pessimistic case, it will start to raise interest rates in July 2025. The interest rate hike will start after a month.
2. When will the problems of Ethereum be resolved?
As the main battlefield of DeFi and NFT, Ethereum is already the second largest "engine" in the market after Bitcoin. The well-known problems of Ethereum have seriously limited the development space of blockchain applications in the direction of DeFi and NFT.
So people put forward various Layer2 and competing public chain solutions, trying to optimize these problems so that these problems can be solved. Of course, what people place the most high hopes on is the upgrade and iteration of Ethereum itself. Once Ethereum 2.0 is successfully implemented, it will be a major progress in the field of encryption, and many applications that were only dreamed of before will become a reality.
Recently, according to a report released by the Australian Union of Accountants (CPAAustralia), the Australian government is considering launching a CBDC project on the Ethereum community. The implementation of Ethereum 2.0 may become the main network of central bank digital currencies in many countries around the world. This space will be unimaginably large.
However, according to the current progress, it is expected that Ethereum 2.0 will not be able to land until at least 2023 or even longer, and it is not ruled out that there is a certain probability that it can be significantly advanced.
3. Can DeFi and NFT last?
This is one of the places where this bull market is stronger than the previous bull market, that is, this round has DeFi, an application that has a certain self-hematopoietic function and sustainable development.
The sustainability of DeFi itself has basically been verified, and NFT has also made progress one after another. NFT attracts many players through the game field. Under optimistic circumstances, it can win with the "quantity" of users.
But there are two problems. One is that DeFi is valuable and has a certain degree of continuity. This is true, but if the market is overheated and greatly exceeds expectations, it is only a matter of time before it falls back.
The other is that, as mentioned earlier, the current performance problem of Ethereum is also a development ceiling for applications such as DeFi and NFT. If DeFi cannot bring in a steady stream of funds, the rate of return and attractiveness will plummet. If the game NFT cannot bring more players, then the future may not be sustainable.
Of course, Ethereum is temporarily unavailable, and there are backup solutions, that is, Layer 2 and some competing public chains...
4. Can Ethereum Layer 2 and competing public chains truly "take over"?
The blockchain has finally ushered in the hope of the whole village: DeFi can bring in more funds, and NFT, an application that "out of the circle" to attract users. Wouldn't it be a pity if we didn't move forward?
At present, Roullp also has some problems to be solved, such as user operation habits, interoperability between the second layer, the cost and time of transferring tokens between the first and second layers, etc., as well as real security issues, which may also take time to verify.impossible triangleIn addition to Layer 2, there have been many popular public chains such as Polkadot, BSC, HECO, Cosmos, and Nervos recently. Rather than competing, they are now more compatible with Ethereum and helping Ethereum solve problems.
This is different from EOS, which was born in the last round of bull market and stands on the opposite side of Ethereum. Compatibility means that they can also be like Layer 2, allowing the Ethereum ecosystem to migrate seamlessly and quickly to form a new ecosystem.
There is a trade-off between performance and security, if the performance is temporarily selected, will it bring about security issues? Will the big money pay for the solutions they offer?
postscript
At present, tens of billions of funds have entered these competing public chains, which shows that the group of people who eat crabs is not small. However, the risk of ecological running away and continuous security accidents in the competitive public chain is still greater than that of Ethereum itself, so funds are still quite cautious.
Although Layer 2 is not yet very mature, and competing public chains cannot accommodate too much, at least this round of bull market has a better solution to take over. If the overflowing value of Ethereum can be continuously picked up, the market can continue.
