PayPal Yang Zhou: From the perspective of macroeconomics and circulation to see the deterministic opportunities of Bitcoin | 2020 New Area Summit
On August 28, the "2020 New District Potential Blockchain Technology Finance Summit" was held in Beijing.
This summit is co-hosted by Huobi Group, 36kr and Odaily, sponsored by Behelix & HBTC, strategically sponsored by ChainUP, specially sponsored by PayPal Finance, Conflux, BitUniverse, WaykiChain, XnMatrix, Hashi Co-sponsored by Technology, Mixpay, COCOS, and Shanghai Diyi.
Many authoritative experts and professors from financial institutions such as funds, securities, banks, and industry leaders gathered here to share new information on financial technology and explore the future potential of blockchain. (Link to the live broadcast of the summit:https://play.yunxi.tv/pages/27c9b4494d09487c8e9c9866e38895e8#/）
Many authoritative experts and professors from financial institutions such as funds, securities, banks, and industry leaders gathered here to share new information on financial technology and explore the future potential of blockchain. (Link to the live broadcast of the summit:
At the meeting, Yang Zhou, founder and CEO of PayPal Finance, gave a keynote speech on "Finding Certainty in Uncertainty", focusing on the uncertainty of the macro economy, and pointed out the certainty of Bitcoin, the main asset in the encrypted world.
It is also confirmed from the data, including the asset stock of the exchange, the growing pledge amount in DeFi, and the data seen by PayPal as a large lender, all of which show that the circulation of Bitcoin is decreasing from "312" to now. A new round of upward trend may be brewing.
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The following is the full text of the speech organized by Odaily, enjoy:
Hello, leaders, I am Yang Zhou from PayPal Finance.
2020 is really a year of ups and downs. We encountered the epidemic at the beginning of the year, and then the Sino-US conflict intensified. After all this, we realized that there are many uncertainties. I'm not sure how the relationship between China and the United States will evolve, and whether the epidemic will come back this fall. We are more sure that the blockchain is a good opportunity. I also want to share some of PayPal's efforts in this industry this year.
The first thing is to say what we have seen, investment has entered the era of deglobalization.
The end of the new crown epidemic is actually far away. One of the data I shared is that the number of confirmed cases of the new crown epidemic has reached 21 million. Although our country is doing very well, thank the party and the government for giving us this opportunity to share here, but in fact other countries are still increasing the process of. What is its impact on us? What we can see intuitively is the economic recession. Yesterday the United States announced the second quarter GDP. I think it has dropped by 30%. The Federal Reserve also expressed an idea during the meeting that it will maintain the GDP for 5 years. Zero interest policy, no interest rate hike until 2025, this is completely monetary hegemony and plunder of the whole world.
We can see that the European Central Bank and the Bank of Japan are also following up. From this perspective, we can see that many investors have nowhere to go.
We can see a data from Bloomberg below, the green line is the Treasury bond yield, and the white line is the S&P 500. After "312" we noticed no change in the national debt. So where does everyone's money go?
Looking at the rise of the S&P 500, we can probably see that many investors have poured into the stock market. To be more specific, if you look at the top five companies in the S&P 500, almost all of the funds are contracted. After removing these five companies, we find that the line of the S&P is still flat, which means that everyone’s money is pouring in. Into the so-called best assets.
It can be said that under such circumstances, for investors, there are only very few opportunities for them to invest.
The investment environment is like this, let's look at the political situation. Due to the new crown epidemic, changes in monetary policy, including the hegemony of the dollar just mentioned, global geopolitics is also becoming more tense. To give the smallest example, our overseas Douyin version is being forcibly acquired, and I won’t list the others one by one.
These things are telling us that our future has great uncertainty. Therefore, after "312" and after "71", many customers, especially domestic customers, came to us to ask how to buy Bitcoin.
Taking this opportunity, PayPal is currently applying for No. 9 license in Hong Kong, a compliance license for investing in virtual assets
I just mentioned that some investors came to us to ask about Bitcoin, and there are also some big shots in the investment world who are making some magical choices.
The picture on the left below is Buffett, who has historically been pessimistic about gold and Bitcoin, even comparing them to "rat poison". But that's the kind of guy who started investing in gold mining companies.
Paul Tudor on the right is also a bigwig in the American investment community, and he recently invested in Bitcoin. Yesterday, DGC, the largest encrypted asset investment company in the United States, also announced that they will invest 100 million US dollars into the mining industry. Whether it is from the perspective of reasonable tax avoidance or asset allocation, we should really take a look at what is driving them to make such a choice .
Speaking of this, I would like to mention that not long ago, PayPal organized a snow-climbing activity in Yunnan for our major customers. While enjoying the pleasant scenery, we also held a small closed-door meeting. We have a common understanding that Bitcoin, as the foundation of the cryptocurrency industry, still has many opportunities under the current situation of heightened global uncertainty.
Just now we said that there are two possibilities. One is that the central bank has successfully released water, such as the Federal Reserve and the European Central Bank. They have successfully released water, and the economy has recovered, and the price of Bitcoin will naturally rise.
Another possibility is that the central bank's policies will not work, and the Sino-US conflict has intensified and even triggered further geopolitical risks. In this case, Bitcoin may usher in a better opportunity, so from these two perspectives In other words, in the face of uncertainty in the future, Bitcoin is actually quite certain.
From a microscopic point of view, we can look at the supply and demand of Bitcoin. The current daily output of Bitcoin is 900 pieces per day. Grayscale, a company that invests in Bitcoin legally in the United States, has invested 400,000 Bitcoins. The scale of 2,000 is increasing every day; the other is the situation of the exchange. We noticed that after "312", a large number of bitcoins flowed out from the exchange. If you go to the website to see which exchanges have less coins, everyone will suddenly understand , students who are interested can go and have a look.
Source: GlassNode
The recently popular DeFi is also using Bitcoin. On June 17th, there were 5,700 bitcoins locked in Ethereum and DeFi. By this year, there were 57,000, and the number is increasing rapidly every day. Therefore, there are about 2,000 coins locked into DeFi from the circulation market every day. Just now Also said, the current daily output is 900.
As a lender in this industry, PayPal lent more than 20,000 coins in March and April, and then we found that more than 17,000 coins either entered Grayscale or were locked
In short, the circulation of Bitcoin is decreasing.
Let me introduce PayPal again. Here is a picture summarized by a media in the United States, which includes financial service institutions in this industry. Of course, people would say that PayPal is a lending company from the traditional perception. But in fact our business is not limited to lending.
PayPal's customers are institutions and some high-net-worth users. In addition to lending, we also provide them with encrypted asset custody and institutional services; we also have our own mining industry, including mining machine loans and mining pool services launched with our partners. In addition, we have our own private platform, great customer service, including the mountain climbing mentioned above are some of the activities we organize
Finally, I have talked about so many uncertainties above, but I actually want to tell you three sentences: control what you can control, find certainty in uncertainty, and be a friend of time
We have customers who ask us for loans, and we can basically control the leverage. In this industry, we should all control our hands and leverage well, and we should also learn from the central bank to deleverage.
Looking for certainty in uncertainty, the two possible directions of Bitcoin’s global macro economy just mentioned are likely to benefit
