Under the bull market dominated by the main force of the currency circle, it is hedging with retail investors

Today's headline is a very frustrating fact. As early as the beginning of the decline, it has been mentioned that this round of decline will last for dozens of trading days. It has been less than half of the time now, and the market trend also shows that the decline is inevitable. There are signs of decline, but is this the case? Will the market continue to fall? Salary doesn't think so. First of all, we all need to figure out who is behind this bull market.

Large holdings of traditional institutions

Since October 2020, Bitcoin has continued to rise sharply. On the evening of February 20, the price of Bitcoin once exceeded $57,000, and the total market value reached about $1.1 trillion, setting a new record again. So far, compared with the low of more than $3,800 in March last year, the price of Bitcoin has risen by more than 1,300% in less than a year.

Citibank stated in a recent research report that in December 2021, the price of one bitcoin will reach $318,000, ushering in a super bull market. Regarding this round of price surge, many people believe that the root cause is the increase in currency, which has led to many investment institutions and listed companies increasing their holdings of Bitcoin.

The sudden outbreak of the epidemic in 2020 has caused countries to fall into economic recession, and economic risks have continued to increase. In order to stabilize the economy, many countries, especially the United States, have launched a large-scale monetary quantitative easing model.

With round after round of interest rate cuts, more and more institutional investors began to buy Bitcoin. At present, many top institutions on Wall Street, including JP Morgan Chase, Standard Chartered Bank, Citigroup, Deutsche Bank, DBS Bank Group, Fidelity Securities, Nomura Securities, etc., have begun to promote Bitcoin.

According to JPMorgan Chase's prediction, only 1% of the funds allocated by financial institutions in the United States, Europe, Japan, and the United Kingdom are required to allocate Bitcoin, and the Bitcoin market will increase incremental funds by 600 billion US dollars, forming a long-term positive support for Bitcoin.

Grayscale Fund is a staunch long-term investor in cryptocurrencies. According to Coin98 Analysitc statistics, during January 2021, the number of Bitcoins purchased through Grayscale’s Bitcoin trust product GBTC was 41,430, while the Bitcoins mined in January were 41,430. 28943 pieces. At present, the total holdings of Grayscale Fund have exceeded 40 billion US dollars. It is the largest cryptocurrency trust and compliance business benchmark in the United States, and it is also the main window for traditional funds to enter the encryption market.

Grayscale Fund tweeted that in the fourth quarter of 2020, the inflow of Grayscale Bitcoin Trust Fund reached 2.8 billion US dollars, a record high. This brings the inflow of the Grayscale Bitcoin Trust Fund to $4.7 billion in 2020, more than four times the cumulative inflow in the previous six years.

Grayscale CEO Michael Sonnenshein said that institutional capital and national adoption of digital assets will drive the next bull market, and 2021 will be a critical year for digital asset investment. On January 15, Grayscale’s series of products raised more than US$700 million, setting a record for the highest single-day increase in Grayscale’s assets.

Multinational large companies run on the bus

With the price of Bitcoin rising all the way, more and more well-known companies have begun to publicly announce that they will use Bitcoin as an asset allocation.

Among them, Tesla is the most famous.

On the evening of February 8, Tesla submitted documents to the SEC showing that as part of its latest investment policy in January, it has invested a total of $1.5 billion in Bitcoin, and may acquire and hold digital assets from time to time or for a long time.

This move is interpreted as a milestone event in the encryption market, which is conducive to the future development of the industry. On the one hand, it will promote more institutions and listed companies to purchase cryptocurrencies such as Bitcoin, and on the other hand, it will also promote more institutions to adopt cryptocurrency payments.

Recently, Musk has been dubbed the world's largest cryptocurrency "singer king". On January 29, after Musk changed his Twitter profile to "Bitcoin", Bitcoin rose by nearly 20% in a single day. Since then, Musk has started to promote Bitcoin and Dogecoin frantically using Twitter as the main position combined with other media platforms (such as Clubhouse). On February 4, Musk tweeted that Dogecoin is people's cryptocurrency, which can be owned without being a superhero. DOGE exploded in a short period of time, with an increase of more than 70% within a day.

U.S. software giant MicroStrategy is the listed company holding the largest number of bitcoins in reserve assets. Since Microstrategy announced that it will use Bitcoin as an asset allocation in August last year, the stock price of its listed companies has risen sharply, even exceeding the increase of Bitcoin. According to a document released in February this year, according to the announcement, as of February 24, MicroStrategy held a total of approximately 90,531 bitcoins at a total cost of $2.17 billion, with an average purchase price of $23,985.

MicroStrategy CEO Michael Saylor said that the most scarce asset in the world is Bitcoin, which is digital gold. In addition, Saylor also stated that gold will lose to Bitcoin in the reconfiguration, and if people buy gold instead of Bitcoin, they will lose $2 billion. He believes that once people start thinking that what they want is a non-decentralized store of assets, they will realize that Bitcoin is better than gold, and at that point, all institutional money will flow from gold to Bitcoin.

Recently, MicroStrategy announced that it will raise $900 million in senior convertible notes to purchase more bitcoin. In addition, the company could raise another $150 million if its initial purchaser chooses to acquire a larger amount of notes.

Under the fundamentals, we can see that under the influence of the epidemic, this round of bull market is almost jointly promoted by major investment institutions and emerging companies with a lot of cash flow. In fact, this situation is hedged with retail investors, so a big rise is bound to be followed by a big drop. This is the factual experience summed up from dozens of ups and downs in the past three months of the Great Leap Forward of the currency circle. Therefore, Xinhuo has long mentioned that in this round of bull market, later traders do not recommend holding transactions in a medium-to-long-term manner. The best way is to buy as expected, and stop profit and stop loss immediately after reaching the expectation. If you enter the market after the next cycle, you may miss part of the market, but at least your funds are guaranteed to be safe.

By the way, I need to mention one more point. Fans who have fallen a lot in this round of spot trading privately believe that the fire bull is gone. In fact, the bull market is still there, but you need to be patient in the game with the main players, otherwise the main chips cannot be concentrated, and they cannot pull Disk is not.

At the end of the article, let’s talk about the short-term trend. Spot traders can withdraw, otherwise your mentality will inevitably be damaged. Xinhuo speculates that in the next three trading days, it will continue to operate in a low-level and sideways trend to digest the negative news caused by our "calling king" and Y Lun's propaganda. There is no way, this round of bitcoin pullback is really rapid, resulting in a continuation of the callback, and friends who are stuck can choose to wait and see the changes and change time for space, and friends who have not yet entered the market can continue to wait or divide their positions Intervene, remember to take full position.