The news that Evergrande Group hired Founder Securities Chief Economist Ren Zeping with a high salary once detonated the Internet. When I opened old pictures on the Internet, after three years, I still felt the gap between migrant workers and migrant workers.

The above is just to illustrate Mr. Ren Zeping's status in the real estate world. He is both a theorist and a practitioner, and has dual work experience in securities companies and leading real estate companies. He has said many interesting theories, but there is one theory with only three sentences, which sums it up quite well:

Look at finance in the short term, land in the medium term, and population in the long term.

It is clear from the beginning that the logic of Bitcoin’s currency price is also the same:

Look at finance in the short term, supply in the medium term, and population in the long term.

Let me briefly describe Mr. Ren Zeping's three-sentence theory:

• short-term financial

In the field of real estate, finance usually affects two aspects. One is the demand side: the short cycle refers to the change in the payment ability of home buyers to a certain extent through measures such as interest rates and fee ratios in the context of my country's overall policies. This point will have some variation in different provinces and territories. Another aspect is the supply side: for example, the tightening of the loan amount and loan time for real estate companies. Similar cases can refer to Wanda's recent "strong man cut off his wrist" situation.

• supply in the medium term

It generally takes 2 years from land supply to real estate development, and it takes a long time from development to delivery. The amount of land supply determines the housing price. Here you can refer to the real estate development in Hong Kong.

• long term population

As the name suggests, it depends on the net inflow and outflow of population—this is the case for a certain city. If you look at the general trend, you look at the urbanization rate of our country.

The urbanization rate is less than 55%, the population is shifting from the countryside to the city, the urban population is expanding, and the manufacturing industry is booming; the urbanization rate is between 55% and 70%, and the growth of some small and medium-sized cities is slowing down, while the proportion of the population in the metropolitan area Continue to rise, this stage is accompanied by the decline of the manufacturing industry and the relative development of the service industry. The urbanization rate exceeds 70%, the population continues to concentrate in metropolitan areas, the population growth of small and medium-sized cities is slow, and the service industry continues to develop.

"Real Estate Cycle" by Ren Zeping

secondary title

short-term financial

image description

The picture above is from Bloomberg, related links:https://www.bloomberg.com/

Another article link in the red box is also very appropriate: Is Crypto Finally Going Mainstream? (Will encrypted assets enter the mainstream?), and the so-called mainstream refers to institutional investors. The Bridgewater Fund led by Leo has average performance this year, which may be one of the reasons why he paid attention to Bitcoin again. It is said on the Internet that Leo was slapped in the face. Instead, I feel brave enough to admit that I did not understand it is the true nature of a hero. It takes courage to admit that something about Bitcoin is missed and to be open about it.

secondary title

supply in the medium term

It is easier to understand here. For example, the halving market directly stimulates the reduction of supply. Bitcoin is short-term inflation and long-term deflation. Some people will say that new circulation is generated by mining machines and mining every day. How can it be simply called deflation?

It just means that the growth rate of circulation has slowed down, and about 900 BTC are generated every day, (1800 BTC before the halving in May 2020). The number of bitcoins produced globally every day is a theoretical value. After a long cycle, the daily supply is 900 BTC.

The analogy of real estate is land and houses. The supply is increasing, but the increase is far behind the demand.

secondary title

Looking at population (flow) in the long run

Looking at the population in the long run, it refers to the population who come to participate in Bitcoin investment, blockchain-related industries, and concepts. Simplified understanding is traffic.

Why is bitcoin going up? The basic principle is that supply exceeds demand, some people buy, and some institutions buy. The more you buy, the more you go up. But why should institutions buy? Because there are a large number of retail investors, large investors, and institutional support—that is, consensus. A sign of a high degree of consensus is a large population of currency holders. This is a traffic business. The number of people holding currency addresses in the world does not participate. First, one person can have many addresses; second, multiple people can also use one address. For example, many people’s currency is placed in a centralized exchange. Therefore, such as Coinbase and Huobi, for example, multiple people use a multi-signature wallet, and the number of users counted by the number of addresses will be much less. However, when there is no reliable data, some growth or decay trends can be seen by using the number of active addresses and the total number of addresses.

There are more than 1 million active addresses in the world, and the total number of addresses is more than 30 million. There are millions of people who have participated in Bitcoin investment, and there should be tens of millions of people who have participated. As a single investment category, if Bitcoin is regarded as a stock, the number of participants of 10 million people is really too many, so it is difficult to compare the value evaluation of Bitcoin with the market value of a large company in the traditional field. Few company shares are held by millions of people.

Take a recent popular stock as an example:

In the last quarter, the number of shareholders of Fosun Pharma was 324,800.

However, it is not too exaggerated to compare the data. Assuming (even if) millions of people have BTC (no matter how many, 0.000001BTC accounts are also counted), it is not too much for an investment target that is called subversive/revolutionary. So it's really early days.

An excellent theory has two requirements, first, it can accurately judge the future; second, it is concise enough.

Such theories include Newton's three laws of mechanics in physics, Ren Zeping in the real estate industry summed up the trend of real estate prices in three sentences, and today's Bitcoin in three sentences:

Look at finance in the short term, supply in the medium term, and population in the long term.

Of course, in fact, all the explanations are not as important as these fifteen words. Readers can burst out more ideas and details on this basis, and can query more detailed data.

From this point of view, in the long run, Bitcoin is still in its early stages. In the medium term, the halving in May 2020 is good. In the short term, financial institutions have also appeared to enter the market, which is good. The currency price is far from the so-called top.