Conjecture on factors affecting cryptocurrency market in 2021
Since the beginning of 2021, the currency circle has been advancing all the way. The market value of Bitcoin exceeded one trillion U.S. dollars on February 19, 2021, becoming a "trillion club member" as famous as Apple, Microsoft, Amazon, and Google. Why did Bitcoin break through the trillion mark in a short period of time? Is it because of the entry of institutions? Good regulation? ETFs are booming? Or is Musk frequently "bringing goods" for Bitcoin? In this regard, Roxe Payment Network held an online event with the theme of "Conjecture on Factors Affecting Cryptocurrency Market in 2021" in Clubhouse's [Roxe Chat Room] on February 16, which attracted the attention of senior investors and practitioners in the industry , and sparked heated discussions.
"This round of bull market has little to do with the technical aspects. The main reason for the relatively strong fundamentals is the entry of new external funds and institutions. Generally speaking, the two relatively strong fundamentals are: the fundamentals outside the circle of foreign institutions The outside of the currency circle is mainly the entry of new institutions and the benefits of supervision, that is, one is an institutional factor and the other is a compliance factor.” Kevin said.
Kevin further analyzed that since October last year, many large institutions have deployed cryptocurrencies, such as Grayscale, Tesla, and even Swedish pension funds, and more than a dozen listed companies on Nasdaq have all bought Bitcoin. , The entry of institutions has led to an upward trend in the entire market. In terms of compliance, Canada has just passed the application for the first bitcoin ETF in the market not long ago. At the same time, many institutions in the United States have submitted bitcoin ETFs to the SEC, and it is expected to pass this year. From this point of view, the European and American markets It is gradually complying with the regulations, which is why ETFs are so popular. In addition, the news of Coinbase’s listing this year is also an important step towards compliance for encrypted assets. Based on the above factors, the compliance of the encryption industry in Europe and the United States, especially the United States, is becoming more and more perfect, which belongs to the positive fundamentals outside the circle. From the perspective of digital currency itself, the first is the application of landing, such as the mature development of DeFi and lending, etc. The rise of related conceptual tokens such as UNI, SUSHI, AAVE, and MKR is also related to these factors. In addition, Kevin is very optimistic about the development of Polkadot, DeFi, NFT, and public chains, and recommends that everyone hold encrypted assets for a long time.
Alison reviewed the market trend of Bitcoin since March 12, 2020. She believes that the rise of Bitcoin from $10,000 to around $20,000 and $30,000 is mainly due to the entry of institutions. After this rise, there have been structural changes in the main investment force. FOMO sentiment and KOL orders have had a greater impact on the currency price.
Alison pointed out that it is necessary to keep abreast of industry development and policy trends in order to seize the bull market in time. In the first half of the year, she paid more attention to the attitude of the Democratic Party of the United States, which is more friendly to cryptocurrencies. If the funds used to stimulate the economy can flow into the encryption market, it will bring exponential growth. Another point of concern is the supervision of cryptocurrency trusts. Look at the institutions that have entered the market, the latest gameplay, etc. If more institutions join in the future, it will also be a positive development trend. In addition, Alison is also very concerned about some fields other than finance, such as cross-border payment, medical care and basic sectors. These fields are currently discussing the application of distributed ledgers. Currently, Roxe payment network is doing blockchain technology in cross-border remittances and payment applications. Regarding the trend in the second half of the year, Alison believes that there may be a round of institutional selling pressure in Q4, which will trigger volatility, but volatility may also bring greater opportunities and more wealth effects.
Like Alison, Rick is also very concerned about the cross-border payment track. He said: "Currently, the SEC's prosecution against Ripple has caused public doubts about the compliance of digital currencies issued by centralized institutions, and the recently paid attention to the Roxe payment network has a huge advantage in terms of compliance. With Digital currency is gradually recognized and accepted by the public and traditional financial institutions, and the use of digital currency technology to transform traditional finance is also on the agenda. The Roxe model that is seamlessly compatible with traditional finance is being accepted by more and more traditional financial institutions. It is believed that with the maturity and implementation of the Roxe network, Roxe will surely become an excellent example of blockchain applications in the cross-border payment industry and a benchmark for the next generation of global payment networks. From this perspective, the development prospects of Roxe are very clear , I will continue to pay attention to the development process of this project.”
"From a fundamental point of view, although the whole world has been affected by the epidemic in 2020, the global stock markets have not fallen, but have risen instead, especially the three major US stock indexes have repeatedly hit new highs." Eric said that in this round of bull market Among them, many institutions have entered the encryption market, and the currency price has also risen accordingly, and it has also attracted the entry of external retail investors. Under the FOMO sentiment, the currency price has been further pushed up, so he is very optimistic about the market in 2021. In addition, due to the loose policies of currencies of various countries and the characteristics of Bitcoin itself, it has a better development. Compared with the market value of gold, Bitcoin is currently only one-tenth of its value, and the future development space is very large. In addition, DeFi is also a very good investment field. The advantages of decentralization may make it a better alternative to some important components of traditional finance, thereby promoting the better development of DeFi.
"The volume of the encryption industry is still relatively small, and there is a lot of room for development. At present, due to the impact of the epidemic, global currencies are flooding, so the investment market will also be flooded. As long as the global money printing continues, the bubble will continue. The engine of this round of bull market is institutional investors, but the selling of institutions will also be the biggest risk of this round of bull market.” Bruce pointed out that no matter when the market bursts, it is not a positive signal, only a slow rise and a reasonable correction This is the key to the continuation of the bull market. Bruce suggested that the current holders of encrypted assets try not to sell their assets. If you have not yet started, it is recommended not to start at the current high point. You can calmly analyze the market and situation, and accumulate strength for future investment.
In the bull market, the myth of getting rich overnight is performed almost every day, so how should retail investors allocate assets? Jasper said: "Asset allocation should comprehensively consider the scale of assets held, investment cycle, and risk preference, rather than blindly following the trend. For stable investors, they should invest in some low-volatility projects; For type investors, they are more inclined to invest in some high-risk new projects, which depends on their own circumstances. My personal investment style tends to be stable, so 60% of my assets are invested in BTC, ETH and other high market value currencies. 30% will be invested in growing currencies like DOT, 5% will be invested in some high-risk small currencies, and 5% will be used as reserve funds. Of course, the above is just a personal opinion, and the final asset allocation still depends on your own situation. .”
To sum up, in this round of bull market, factors such as the new crown epidemic, the central bank’s massive release of water (mainly in the United States), the entry of institutions, the popularity of ETFs, the outbreak of DeFi, and favorable supervision are the main driving forces for the long-term rise of BTC. The trend of the industry in 2021 is also optimistic. The cryptocurrency industry is still in its early stages, and this stage is especially suitable for investors to find investment opportunities that suit them.
