Will bitcoin go up this year? How do VCs view the market outlook?
Since the market entered a deep bearish market at the end of 2022, people's expectations for the next round of the market cycle are mostly placed on the halving of Bitcoin in 2024, and the market conditions in 2023 are not optimistic. Judging from the performance of the market at the beginning of this year, it seems that this is indeed the case. Although market sentiment ushered in "spring turmoil", what is more showing is the rapid rotation of sectors and hot spots, and there is no sign of new funds entering the market.
Earlier this month, Silicon Valley Bank was hit by a thunderstorm, and the ripple effect spread to the encryption market a few days later. USDC has been squeezed because its issuer, Circle, has deposits in SVB, and there has been a sharp decoupling, and the market seems to be slipping into freezing point again. But what is surprising is that the Fed's rescue arrived in time, which temporarily eased the liquidity crisis in the banking industry. Immediately afterwards, Bitcoin ushered in a round of "violent pull-ups" in the next two days, with a rare intraday increase of 20%. The sudden rise has disrupted the position of many investors. After regretting their failure, everyone began to think again: Will Bitcoin continue to rise this year? In this regard, BlockBeats listed 8 questions that the market is most looking forward to answering, and solicited opinions from the following well-known institutional investors:
BMAN，ABCDE Capital。ABCDE was co-founded by Huobi co-founder Du Jun and former Internet&crypto founder BMAN, dedicated to investing in and supporting Web3 Builders;
Jason，Folius Ventures。Folius Ventures invests, popularizes, and participates in the construction of the Web3 ecosystem, and is committed to supporting Asia-Pacific and Chinese entrepreneurs;
Pima，Continue Capital。Continue Capital was established in 2016, focusing on investing and incubating global blockchain technology, early technology start-ups and providing quantitative trading services;
Bill，Cypher Capital。Cypher Capital is a multi-strategy Crypto investment fund headquartered in the UAE, covering VC, secondary market, nodes, BTC mining and other fields;
Jerry，Synergis Capital。Synergis Capital invests in the next generation of early-stage startups and drives their growth by activating its network of paradigm leaders.
secondary title
1. BTC has been rising for several days in a row, and it is ready to hit the $30,000 mark. What is your judgment on the direction of the crypto market in the second half of 2023? How long will this BTC bull market last?
BMAN - ABCDE Capital：The market has gone through several rounds of deleveraging. We have observed that a large number of institutional funds have bought BTC in the range of 18,000 to 20,000 US dollars. We tend to think that the bottom has already appeared and will not make new lows. In the second half of the year, a number of large-scale projects will be launched on the test network. Next year, Bitcoin will be halved again. The market is still one narrative away from the bull market, just like the DeFi Summer in 2020, which is worth looking forward to.
Jason - Folius Ventures：Personally pessimistic. The transition from tightening to loose is taking place, but the risky asset prices after loosening and the possible return of inflation may lead to policy mistakes by the Federal Reserve. At the same time, superimposing actual thunderstorms will cause the United States to enter a deeper recession. The market is likely to price in this in Q3. Personally, I prefer to work hard in the first half of the year, and take one step at a time in the second half.
Pima - Continue Capital： More than 40,000 US dollars, cautious in the second half of the year.
Bill - Cypher Capital：After BTC fell to a range below $30,000 from the LUNA incident in 2022, BTC has been consolidating in this range for more than half a year. Since the LUNA incident is the superposition of macro factors that caused some funds to leave the market and lead to the decline, if we can see more funds re-entering the market, we will have confidence in the follow-up trend of BTC. In this SVB incident, for the first time, there was a completely different market between bank stocks and BTC. We think that there may be more such market divergences in the future.
Jerry - Synergis Capital：secondary title
2. Many people believe that the liquidity crisis is the main problem facing the encryption and even the global market in 2023. In your opinion, after the Federal Reserve announced the rescue plan for SVB two weeks ago and a series of subsequent measures to improve liquidity, liquidity Can the crisis be resolved? Has the market's long-awaited "reversal" node arrived?
BMAN - ABCDE Capital：Same as question 1.
Jason - Folius Ventures：It has not been completely resolved, but the market has roughly predicted possible problems in the future, and the Fed will make more relaxed choices because of these problems. Therefore, even if the problem is not completely resolved, I personally think that risk assets will continue to improve in the first half of the year.
Pima - Continue Capital：All parties are playing games to put pressure on the Fed, and liquidity has eased in the short term; global confrontation has led to the reversal of the low-inflation global division of labor model of "cheap energy + demographic dividend low-end manufacturing + consumption", depending on how the inflation rate in the second half of the year is the least likely to decline Decrease, the second half of the year is a window period for observation, and it is difficult to talk about reversal.
Bill - Cypher Capital：It should be noted that the bank's liquidity crisis solved by the Federal Reserve's BTFP plan is not the same thing as the liquidity of the risky asset market. The BTFP plan does not permanently remove assets such as bonds from the bank's balance sheet, which is different from the previous quantitative easing. The cryptocurrency market has rebounded a lot after the bank bailout, and we should look at the issue of market risk more forward-looking.
Jerry - Synergis Capital：secondary title
3. In the past week, BTC has experienced a rare single-day increase, but ETH has not moved much. How do you understand this market performance? Is it new funds entering the market, or is liquidity gathering?
BMAN - ABCDE Capital：On the one hand, funds to avoid bank bankruptcy flowed into BTC, and on the other hand, the initial stage of market rise was the blood-sucking market of BTC.
Jason - Folius Ventures：BTC more follows gold + long-term debt trading recession, while ETH more follows Nasdaq and long-term debt. BTC is generally under-allocated by currency circle institutions. ETH should outperform BTC when risky assets resume their easing rally.
Pima - Continue Capital：ETH has had a round of rebound from $800 to $2,000, touching the long-term moving average; BTC has not yet experienced such a large-scale rebound, and this time it will be supplemented.
Bill - Cypher Capital：The short-term volatility itself is difficult to explain. If you want to pay attention to the price trend, there is a saying "When in doubt, zoom out." And it is also one-sided to only look at the fluctuation of ETH itself. For example, Arbitrum in the ETH ecosystem recently is very hot, but this is not necessarily immediately reflected in the price of ETH itself. In addition, if we compare the Crypto industry with traditional industries, then BTC is "gold" and other currencies are "business". In the past week, BTC has played the role of "safe haven asset gold" in a sense.
Jerry - Synergis Capital：secondary title
4. If there are indeed new funds entering the market, will these funds entering BTC continue to flow into ETH or other public chain ecosystems, driving the growth of DeFi, NFT and other sectors? Which sections will you make layouts on?
BMAN - ABCDE Capital：We believe that there will be a rotation of capital sectors in the future, and we will deploy leading projects in each sector.
Jason - Folius Ventures：High probability. The existing plates are not very flexible. Individuals are still waiting for the application layer. You can follow the flow of ARB air investment funds.
Pima - Continue Capital：If there is new capital, it will be diverted, and it will not increase generally; individuals will lay out new public chains, L2, and ominchain directions.
Bill - Cypher Capital：Most definitely. Cypher is not going to be an ETF for a certain sector, so we will make a layout in each sector, and we also expect entrepreneurs to take us to witness the birth and growth of new sectors.
Jerry - Synergis Capital：secondary title
5. In the short term, do you prefer BTC or ETH? What are the reasons?
BMAN - ABCDE Capital：I am optimistic about BTC in the short term. The crisis of bank bankruptcy has not been resolved, and funds will enter BTC in the short term.
Jason - Folius Ventures：Both look good, the narrative is different. Both are good, I personally don't want to choose.
Pima - Continue Capital：This question should not be considered.
Bill - Cypher Capital：I am personally optimistic about BTC in the short term, because this is the migration of funds to "backed by math, instead of backed by centralized protocol" under the global macro narrative. Cypher's layout in the cryptocurrency market is long-term, and we are not so concerned about short-term market fluctuations. Both the BTC and ETH ecology have innovative and active ecology, and Cypher will actively deploy in both.
Jerry - Synergis Capital：secondary title
6. The Arbitrum airdrop has ignited the development of its ecology again. Do you think the heat of the Arbitrum ecology can last for a long time?
BMAN - ABCDE Capital：The Layer 2 war has just begun and will continue until ZK's Layer 2 project is launched.
Jason - Folius Ventures：very healthy. It should be one of the second floors with the most chances. I think we can look more at the benefits that Axiom + EigenLayer brings to the Ethereum ecosystem.
Pima - Continue Capital：meeting.
Bill - Cypher Capital：After Arbitrum announced the airdrop standard and snapshot time, we did not see a significant drop in the active data on its chain, which shows that users are sticky to its ecology. We look forward to seeing the further development of the Arbitrum ecosystem.
Jerry - Synergis Capital：secondary title
7. In addition to Arbitrum, Lens, zkSync, StarkNet and other projects all have airdrop expectations. Which ecosystem will you interact with in the second half?
BMAN - ABCDE Capital：Layer 2 ecology will be experienced.
Jason - Folius Ventures：It will take time for the ZK track to land. Personally think Scroll will be a dark horse. In addition, you can also take a look at SUI in terms of App.
Pima - Continue Capital：I have few interactions, but I can tell you about projects worth interacting with: zkSync, StarkNet, Sui, LayerZero.
Bill - Cypher Capital：As an institutional investor, we pay more attention to long-term investment.
Jerry - Synergis Capital：secondary title
8. Recently, with the emergence of Ordinals, "BTC ecology" has suddenly become a hot word. Traditional old projects such as Stacks, and new directions such as issuing Token and NFT have all received attention from outside the BTC OG community. But according to our observation, although the heat is still there, hyping Token or NFT on BTC is very complicated and primitive. In your opinion, is the "BTC ecology" a flash in the pan, or is it a new trend that will last for a long time?
BMAN - ABCDE Capital：The BTC and PoW camps have always had long-standing and loyal communities, and they believe and look forward to the emergence of an innovative ecology around BTC.
Jason - Folius Ventures：The Stacks ecosystem takes time. Not suitable for short frying. The real starting point needs to wait for their EVM to go online, which will coincide with the halving of BTC in 24 years. It should be the most flexible narrative in the entire market.
Pima - Continue Capital： At the end of 21, the Taproot upgrade was the main reason for all this. In the long run, it may fail in 4 years, but in the short term, it is a proposition that is difficult to falsify. There is a "poor expectation" in the market, but it is the source of profit, which deserves attention.
Bill - Cypher Capital：Any innovation is not so mature in terms of UI/UX in the early stage, and Cypher has always had a positive attitude towards technological innovation. Cypher participated in the auction of TwelveFold and was lucky enough to get an Ordinals. We welcome entrepreneurs who have ideas and projects in the BTC ecosystem to discuss with us at any time.
Jerry - Synergis Capital：Bitcoin has the largest holder group and the most loyal community foundation. Judging from the data experience of the sustainable development of the lightning network ecology in the past, the probability of the BTC ecology will not be a flash in the pan. Our fund has a systematic layout in the BTC ecology. However, it is believed that there is a clear lag behind the Ethereum ecology in terms of smart contract technology and deployment.
