Editor's Note: This article comes fromBlockVC（ID：blockvcfund）, reprinted by Odaily with authorization.

Editor's Note: This article comes from

, reprinted by Odaily with authorization.From December 2017 to December 2020, after three years of ups and downs, Bitcoin finally hit a new high. Investors who have bought Bitcoin in history and held it until now have all been released. Bitcoin will no longer disappoint anyone, and the New Year's bull market has officially started."Facing the halving market, 6500 at the end of this year is 3200 at the end of last year"

The three core logic main lines in the framework have all been fulfilled:

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People should still remember the sudden impact of the new crown epidemic at the beginning of the year and the suffocating global market turmoil in March. Due to the unexpected liquidity impact, the prices of stocks, bonds, gold, commodities, Bitcoin and other major asset classes all plummeted. The global central bank led by the central bank turned on the money printing machine and carried out "unlimited QE" to inject US dollar liquidity into the market. The huge amount of currency issuance made the US dollar enter a "weak US dollar" cycle. It is this logic that benefits.

From the figure below, we can see that the surge in the balance sheet size of the global G3 central banks is basically consistent with the price trend of Bitcoin.

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Data source: Bloomberg

Even though the real economy is still mired in the quagmire of the epidemic, the global capital market is rapidly rising under the flood.

Judging from the past ten years, the sluggish inflation level has become the reliance of the central banks of various countries to continuously release water, but the specter of hyperinflation has been looming. The COVID-19 pandemic has led to a sharp clearing of macro aggregate supply, unprecedented monetary stimulus has led to loose liquidity and depreciation of the dollar, and aggressive fiscal policies and government spending have stimulated demand recovery, all of which provide opportunities for the development of hyperinflation.

We can see that the yields of long-term treasury bonds in the United States and China have begun to reflect the upcoming inflation expectations, and the weak dollar and inflation will bring a huge boost to the prices of major asset classes denominated in dollars, especially commodities and emerging market assets. The return on RMB assets will be extremely attractive. These signs can be seen from the recent sharp appreciation of the RMB, the price increases of gold, silver and various non-ferrous metals. The recent rise of Bitcoin also benefits from this macro logic, and The melody of a weak dollar and hyperinflation will become the main line of Bitcoin investment logic throughout 2021, and even Bitcoin will have a high probability of being the biggest winner among all major asset categories.

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Institutional Investors and New Gold

As the macro environment shifts towards the most favorable direction for Bitcoin, institutional investors with clear asset allocation logic will accelerate their pace of entry in 2020, and global financial institution giants are also rushing to announce the provision of cryptocurrency services.

The most eye-catching thing in 2020 is the aggressive buying of Grayscale. According to relevant statistics, if the number of bitcoins lost is considered, Grayscale currently holds 3.37% of the market value of Bitcoin in circulation. Considering Grayscale’s Holdings have surged by 50% in the past 6 months, and nearly 83% of investors have bought Bitcoin in the past 12 months. Bitcoin is breaking into mainstream asset allocation at an unexpected speed. Grayscale The investment report also believes that institutional investors are experiencing unprecedented buying demand for Bitcoin ("Unprecedented Demand").

Bitcoin, as a kind of New Gold, has less correlation with large-scale assets than "Old" Gold, and is especially less exposed to macroeconomic changes in fundamentals. It is very suitable for institutional investors to build diversification Asset portfolio, the impact of the new crown epidemic has accelerated the process of institutional investors' awareness of Bitcoin and asset allocation.

Judging from the exchange Bitcoin balance monitored by Glassnode, since the market recovered in March, Bitcoin has continued to flow out of the exchange, which also confirms our judgment that the new funds come from institutional funds. In the future changes in the macro environment, the asset attributes of Bitcoin will be sought after by more institutional investors, and the entry of institutional funds will still be a long-term trend in 2021.

Breakthrough Confirmed, Bitcoin Halving Opens a New Cycle

At a time when the demand for Bitcoin is increasing, the marginal supply reduction effect caused by Bitcoin halving is exerting increasingly strong internal power, and we are already in a new cycle of a long-term bull market.

image descriptionData source: CoindeskOur research report in April this year

The price performance of the bitcoin halving cycle analyzed in the article has been confirmed. From the perspective of the time period, the high probability of this new year's bull will last at least until October 2021; from the perspective of space, bitcoin has broken through 20,000 The U.S. dollar was at a previous high, with the highest impact at the line of 24,000 U.S. dollars. It has already strongly confirmed the breakthrough of the historical high and released all the holdings.

From the perspective of HODL Ratio, we still have a very long way to go before the top of the big cycle.

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Accelerate to the peak in the short term, be alert to the risk of "cold spring"

It can be seen from the MVIS index that the structural market pattern for the whole year of 2020 is very obvious:

In the "spring turmoil" market at the beginning of 2020, the currencies with halving expectations and the more volatile mid-market value currencies showed a relatively strong trend.

After the liquidity shock in mid-March, the pattern of the entire market has undergone major changes. Bitcoin led the market out of a V-shaped reversal, and entered a sideways shock for nearly five months after the halving. During this period, the DeFi market exploded rapidly. Mid-cap DeFi currencies such as YFI, Aave, and SNX have sprung up, reaping impressive price performance.

In mid-September, due to short-term overheating and greed in the DeFi market sentiment, the market experienced a short-term collapse. Then in October, Bitcoin took the lead in stabilizing and started a unilateral market. The index has so far failed to return to the market highs reached in early September.

Since November, the difference between large-cap currencies and small- and medium-cap currencies has risen sharply, and liquidity has gathered towards Bitcoin. This structural trend is mainly due to the continued depreciation of the US dollar and accelerated buying by institutional investors.