Bitcoin market analysis: Why did Grayscale buy BTC in large quantities?
Today is the annual Double Eleven. As of now, the currency circle has not yet held a double eleven discount. According to the current situation, the probability of double eleven discounts is not high. In recent days, Bitcoin has been in a volatile market. Yesterday night, Bitcoin also bottomed out according to the habit of the trend in the past few days. This time, the bottoming situation is much better than usual. When it bottomed out at $15,000, it quickly rebounded, and the low point of the bottom was gradually rising, and the overall fluctuation range was smaller than usual, which seems to be a positive signal.
Looking at the current general direction, there are two factors that affect Bitcoin. One is whether the Federal Reserve can continue to release water, and the other is whether other investment institutions will continue to buy Bitcoin.
From the first point of view, the present tends to be stable. Although the general election has been settled, Biden has not officially taken office and has no right to formulate a new fiscal stimulus plan. It is expected that the plan will come out at the end of this year, and Biden will take office in January next year. formally implemented afterwards.
On the other hand, whether institutions will continue to buy bitcoins, the most famous institution for buying coins is naturally Grayscale, and Grayscale not only buys Bitcoin, but also buys many other currencies. Yesterday, Grayscale bought another 1700 Bitcoin, and also purchased 50,000 LTC by the way.
In addition to the BTC and ETH that everyone knows, ETC, BCH and LTC are also held, but the market value cannot be compared with the former two. For example, the total value of BTC currently held by Grayscale exceeds 7.6 billion US dollars, and ETH exceeds 11 dollars, the remaining highest ETC is 60 million dollars, BCH and LTC are 40 million dollars, and the rest are even less, the current total value has reached 9.1 billion dollars.
In addition to buying the currency itself to support the price of Bitcoin, Grayscale has become the market's vane. Which coin you buy may be favored by the market, so the market will also worry about this. If Grayscale smashes the market one day Will it become a disaster in the currency circle?
First of all, Grayscale Bitcoin Trust currently does not have any redemption plan, may stop creating from time to time, there is no guarantee that the value of the shares will be close to the value of the bitcoins held by the trust, and the shares may be higher or lower than the value of the trust. The trust may seek regulatory approval to implement a redemption plan in exchange for the value of the bitcoin held.
In short, institutional investors can get Grayscale GBTC at most after purchasing Grayscale Bitcoin, and investors can exchange BTC for GBTC, but cannot exchange GTBC for BTC, and there is a half-year unlocking time for BTC to GBTC, Therefore, whether it is Grayscale or institutional investors, it is very troublesome to use the BTC in their hands to smash the market, and it is even impossible to implement it.
Secondly, although Grayscale has been buying BTC and the price of BTC has been rising, Grayscale cannot make profits through the rise of BTC. Grayscale’s profit points are management fees and handling fees, which is different from most fund companies. Consistent, and according to the scale of Grayscale's current management, the annual management fee is close to 50 million US dollars, which has exceeded most fund companies.
So why don't these people who buy bitcoins in Grayscale go to the exchange to buy coins by themselves? In this way, owning the secret key and address has a higher degree of freedom.
At present, most of the users who buy Bitcoin on Grayscale are institutional investors, and a considerable number of institutional investors in the United States have restrictions on their investment direction. They cannot invest in currency exchanges in the name of institutions, and can only buy through trust channels. bitcoin.
Secondly, most institutional investors still have a habit of thinking. They regard Bitcoin more as a financial entity. Whether they have a private key or an address is not important. First, whether this product has room for appreciation. The second is whether you can buy this product in a way you are familiar with, and the traditional way of trust is obviously more in line with the appetite of these institutions.
Back to the market, since 0:00 on November 10th, the price range of Bitcoin has become significantly smaller, and the pressure range at the top has temporarily become lower, which is around $15,500.
The lower support level is still the lower track of the same triangular range. After the range is narrower, the duration of the shock will be shorter. First break through the small triangular range and then expand. As yesterday's bottom did not fall below $15,000, the current low It is also getting higher and higher. As long as each subsequent bottom does not fall below 15,000 US dollars, it is only a matter of time before it continues to rise.
In the past two days, several leading coins have appeared in DeFi, and they are still familiar coins. Among them, Uni is more representative, and it has returned to above $3. The trend looks a little healthier, and the rise is accompanied by a correction.
At present, pay attention to the support of 3 dollars. In the early stage, 3 dollars was considered a relatively strong pressure level. It failed twice after hitting it twice, and finally succeeded in standing on 3 dollars for the third time. It has now been transformed into a support level with a certain degree of support.
