Conversation encryption KOL: Bull and bear cycles, SEC regulation, Bitcoin ciphertext and Ethereum "universal unity"
Host: Wu Shuo Blockchain Colin Wu
Guests: Cobo Founder Shenyu, Matrixport CEO Geyue Sheng, Senior Miner Li Peicai
Colin Wu: I would like to ask the three guests to discuss any changes in your thinking or research on the bull and bear cycles. How long do you think the bear market will last, and when will the next bull market arrive?
Shenyu: In terms of judging the bull and bear cycles, there haven't been any major changes from my perspective.
Because of several major factors, one of them being the halving cycle that the entire industry has been following once every 4 years. Next year, around April and May, there will be a normal Bitcoin halving cycle, and generally speaking, historically, a new trend will start about 6 months after the halving. So this is a previous narrative logic, but this time, the reduction in quantity will be a bit less, so the impact may not be as drastic.
From another perspective, in terms of industry-native innovation, the focus is currently mainly on the expansion of second-layer networks and the improvement of performance. Most of these core mainnets will be launched in Q1 and Q2 of next year, so this cycle is also consistent.
Thirdly, from the perspective of entry capital, especially in recent weeks, we have seen a large number of hopeful applications for traditional asset management companies' ETFs. The deadline for these ETF applications is also mostly in the first quarter, so these dates basically coincide.
Another core factor is the macro factor, which may also see some turning points and implementation of interest rate hikes next year. So from these perspectives, I personally think that we should rely on the period after Q1 and Q2 of next year to see if there will be a new influx of funds and new narrative logic.
Li Peicai: I also agree with Shen Yu's point of view. I think halving every cycle serves as an anchor. However, whether it can sustain an independent cycle by halving alone still needs to be observed. Although we have seen bull markets after halving in 2012, 2016, and 2020, we have only observed this phenomenon three times. Whether we can use it to predict the fourth time remains uncertain. From past experiences, the cycle is rarely dominated by a single factor. There are often overlapping narratives, such as the bull market in 2012 and 2013, which was influenced by the Cyprus crisis and Bitcoin entering the public eye for the first time, especially with the participation of the Chinese community. In 2018, Ethereum had the ICO narrative, and in 2020 and 2021, we had the DeFi Summer narrative. Will there be a new narrative in 2024? It may also be a combination of several factors. If halving is the only factor, the level of support for a bull market may be uncertain.
One macro environment that may be worth observing is whether it will have a significant impact. Last year, we saw how the overall cryptocurrency prices were greatly affected by the macro environment of interest rate hikes. If next year, the US Federal Reserve implements a combination of interest rate cuts and quantitative easing, it may further overlap with the halving, potentially pushing the bull market to a higher level. However, there may be another factor to consider: whether there are new narratives or new highlights within our industry that make people feel that they hold more value. I think this is also worth paying attention to.
Similar to the ICO trend in 2017 and DeFi in 2021, I remember reading a piece by Mingdao where he mentioned that although people may not be as enthusiastic about it now, there are still valuable things progressing in our industry. For example, L2, DAO, Lightning Network, and BTC's spot ETF. If these things can further develop and even have some application breakthroughs next year, I think we can look forward to the halving cycle in the coming year. This is my opinion.
Ge Yuesheng: Actually, my view is similar. I have always believed that the next cycle should be in the first half of next year. I would like to emphasize that before such a cycle starts, there is usually a big drop, and recently there were some strange situations after the SEC lawsuit, such as the rapid depletion of liquidity in various exchanges and very low trading volumes. Looking at the data during that period, it felt like a replay of the past, similar to what happened in 2013. So, at that time, I thought there might be a market similar to what happened in 2013, but suddenly there was positive news from the United States that caused the prices to rise. So personally, I feel that there may still be a bottoming process before the next cycle, which will make the bottom more solid. This will also make people with assets more confident to enter the market, and it may be the last opportunity to buy low before the next cycle.
Colin Wu: The second question is for the three guests to discuss. Do you think the SEC's classification of cryptocurrencies as securities will have a significant impact on the industry, especially considering the large number of tokens being classified as securities this year?
Godfish: Personally, I am not very knowledgeable about this issue because it involves legal matters. From my perspective, the strengthening of regulation in this wave seems to be a direct result of the aftershocks caused by the FTX incident. It may be a reflection by regulators on the destructive events that occurred in the industry over the past year, and it could be a compensatory strengthening of regulation, which may also cause some unintended harm. Regarding the classification of these tokens as securities or their delisting from compliant exchanges, there are pros and cons. One positive aspect is that it strengthens confidence in Bitcoin and other core assets during the bear market period, as the regulation clearly indicates that some tokens will not be considered securities. This is a good thing because during the bear market, most assets are highly volatile, and in the long run, it is sufficient to hold onto the core assets. We can also see that these core assets have not been classified as securities by the SEC. So from this perspective, especially for retail investors, it provides some protection, although passive in nature.
On the other hand, it may have an impact on industry innovation and exploration of cutting-edge technologies. We have also seen some entrepreneurs in North America starting to shift their focus in the current high-pressure environment. Even projects that had plans to issue tokens decided not to do so. If the high-pressure regulation continues for a prolonged period of time, especially in North America where most of the early-stage innovations in our industry occur, it may have a passive impact and lead to the diffusion of talent from the Silicon Valley region, ultimately affecting the occurrence and emergence of innovations.
But regulating this matter, in my personal opinion, is something that will inevitably happen as the industry gradually grows and expands. However, the unique nature of our industry also means that there are many technical means and methods of regulation that cannot be fully implemented. Therefore, regulation will also adjust its own pace according to the characteristics of the industry and adapt to its development. In the end, many regulations may seem to be in place, but they may not actually be implemented. Ultimately, a new balance will be reached, so I think this is a state where both good and bad exist.
Li Peicai: I do think that most of the currencies in the industry are highly associated with securities. Apart from BTC and LTC, which have a high degree of decentralization, other consensus-based currencies that serve as currencies even have some characteristics of commercial equity, such as dividends and repurchases. I think they are very similar to securities. Now that the SEC has clarified this matter, I think it might be a good thing in the long run. Since they are considered securities, they may be regulated in a similar way to securities in the future. However, as the industry is as the God Fish said, it does have many technical means to bypass this definition.
Another point is to look at the issue of liquidity. We can look for places with weaker regulation, which I think could be a good thing. That's how optimistic I am. In addition, it is possible to clarify that currencies like BTC, LTC, and BCH, which have weak associations with securities, are not securities. This may relieve the regulatory pressure on these currencies, especially BTC. As a result, spot ETFs and other products may be able to enter the market smoothly. In general, I think this is positive for the industry.
Many of the remaining, I think, if it is actually a functional positioning, you are an equity of survival, maybe everyone will trade according to equity, even in the future, you will be regulated according to equity, and distribute dividends to the shareholders holding these tokens according to equity. You should disclose and organize financial reports, and standardize these things. I even think it may also be beneficial to the development of this industry. For example, in the issuance of securities, some regions may have stricter policies, while some regions may be relatively weaker. More entrepreneurial teams may choose to register securities in regulatory-friendly countries. But for the actual transactions on your chain, it is competitive. For the issuers of securities, as long as there is sufficient liquidity, they may not care much about whether your securities are registered in which market, right? I think in this way, it is possible to make it possible for the project party, from a legal perspective, to complete some securities registration matters. Technically, there is no way to completely regulate it like before, that is, to go to the US market for strict regulation, but have good liquidity. I go to a relatively backward or less developed region, although they may welcome me to register securities there, I don't have access to US orders. But I think there are no geographical restrictions on public chains. It is possible for me to register in a regulatory-friendly country and still conduct my transactions on ETH without any impact. But I think registering this matter may be more complicated.
I think it may also be able to regulate some project parties, and reduce the number of malicious Ponzi schemes. I think because regulation is also a kind of effective social technology for balancing securities issuance, without regulation, it may indeed be a mix of good and bad. After regulation, there may be some positive changes. So my feeling is that this matter is a good thing for BTC, which is positioned as a non-security. And for the remaining tokens, if they are treated as securities and regulated accordingly, it may not be a bad thing to find a regulatory-friendly place.
Ge Yuesheng: I would like to see the issue of securities in the context of a series of actions by the SEC and what is happening in the United States recently. In fact, it is interesting to look at the whole picture of this market in combination. First, the SEC is cracking down on Binance and Coinbase. Secondly, it is trying to define what is a security, what is a token, and what is a commodity. It is attempting to define without legislation, but it claims to have the authority to determine which things are securities and which are not.
At the same time, Wall Street has also produced an extremely extravagant background, edx, which has collected more than half of the banks and investment institutions that we usually see in the news media. Putting all these things together, I think it is very American. Because SEC is a regulatory agency, most of the people in it are studying law. In theory, it usually does not concentrate on cooperating with a new exchange to release these actions, but it just cooperates with a new upcoming US institutional exchange to do this, and its entire rule design is very similar to a stock exchange like NASDAQ, that's it, SEC decides to register, and then says whether you can go up or not, right?
First of all, if you say you want to be listed on NASDAQ, you have to pass the SEC first, and then you can go up to the exchange, right? It's like today, you first have to be recognized by the SEC, and say that you are not a security, and you may be able to go to the US exchange, and at the same time, it did its best to suppress the competitors of this exchange in the US market, and then along with the news of the public launch of this new exchange, I think there may be two possibilities. One possibility is purely a coincidence, and the second possibility is indeed a kind of operation of the American elite. This kind of thing is also quite common in the United States. If it is the latter, this thing will still have a very profound impact.
One is that after the incident at FTX, I felt that US regulation became very toxic, and it didn't allow Crypto companies to open USD accounts, and it suppressed them in various ways, and the whole atmosphere when you go to the US, especially in New York, to talk about Crypto. It even reached the point that after the FTX incident, because at that time, some other things were arranged to talk to people from banks, but suddenly they said they couldn't see them, and so on. I once thought that the United States actually completely turned to negative opinions on crypto. But the launch of edx and the series of actions recently taken by SEC give me a guess, that is, they are not, all the previous actions are laying the foundation, and actually they still want to regain the position of the United States in the Crypto world, and this time the means are even stronger, and the involvement of regulatory agencies is even deeper.
Of course, even if this is the case, it doesn't matter to me, because if you don't go to NASDAQ, you can go to the Hong Kong Stock Exchange. This world is not just the United States. It's just that in the future, if you want money from American investors and want to be listed on the US exchanges, you may need to be approved by the SEC. What standards does the SEC use to approve? This matter has become debatable again in the legislative process, with many options and choices. So I feel that if it is the latter that I mentioned, the second possibility I guessed, it would indeed be a very iconic event in the history of Crypto.
Colin Wu: Do you think the situation in Hong Kong has a significant impact on this industry or the Chinese community? What are the implications? Or what do you think is worth paying attention to or valuable?
Ge Yu Sheng: In my opinion, in accordance with the narrative logic of conspiracy theory that I just mentioned, Hong Kong's capital market used to be one of the top three hottest capital markets in the world. The hottest capital market is still in the United States, but Hong Kong is definitely up there. Now, Hong Kong is also very welcoming to Crypto and is trying to build a Crypto market, which includes exchanges, funds, a series of ETFs, and so on.
I think for the Crypto community, this is definitely a good thing. Competition in the capital market promotes growth in the industry. However, this time in Hong Kong, because it hasn't fully landed yet, we can't see the specific rules it has formulated. Crypto, as a new technology, is indeed quite difficult to regulate. Let me give an example of Hong Kong's regulation that seems a bit different from the intuition of us old cryptocurrency people. They require every exchange to have its own custodian company. As Cobo and Matrixport are custodians, we know that custodianship is costly, with great responsibility and technical difficulty, and requiring every exchange to do its own custodianship doesn't seem like the right direction from a technical standpoint. So I think the starting point is good, and the future is worth looking forward to. But the challenge for Hong Kong's legislators to regulate a new thing and establish a set of rules that truly fit the market is quite significant. I hope they can succeed and correct any mistakes as soon as possible.
Li Peicai: I agree with everyone's opinion. I think at least from the industry and the Hong Kong government's perspective, they are indeed sincere. They want to do something in this area. But I think the underlying motivation is probably to strengthen Hong Kong as a financial center. Yes, because now among these financial markets, although Hong Kong used to be one of the top three financial markets, as Ge Yu Sheng mentioned, its position has been challenged by many other places as time goes on. So, Singapore and Dubai, right?
These are all competing for this position, so they definitely feel some pressure. Therefore, they also want to try their best to regain some market share and even gain some new competitive advantages through Crypto RWA metaverse and other things. I think this attitude should be fine, but indeed, the regulation of entering this industry also faces some technological and many difficulties, right? The technology here may be quite different from the previous financial markets, and there are also many problems, such as anti-money laundering, scammers, Crypto, KYC, etc., which may not be effectively solved by the original regulatory rules. It means that you need to develop some new regulatory rules for the market you need to. This aspect is quite a test of regulatory level. In addition, I think this may also be a problem. The iterative result may be to first release a financial policy and then make adjustments on this basis. I think it is possible, but I think the overall intention is good. If I look at it recently, there have been some news disclosures one after another, saying that some policies are gradually being implemented. For example, some banks in Hong Kong allow customers to buy BTC futures ETFs, and some banks are more friendly to digital currency companies. In the past, if you opened an account and told them that your money came from the Crypto industry, they might directly refuse you. Now it seems that opening accounts in Hong Kong has become much easier for individuals, institutions, and corporate users. I think it will definitely help the industry. So, I still have a cautious and optimistic attitude towards this matter. I think it is still a good thing, which is definitely more beneficial to the industry than a blanket ban like in China. As for whether it will be very beneficial or to what extent it will be effective, we may need to observe the implementation and release of regulatory policies and these specific measures.
Shen Yu: In my opinion, this is definitely a good thing because Crypto, as a newborn thing, although it has a history of more than ten years, it is actually surviving in the game and survival gap under the regulatory environment of various countries. So it's a good thing that some regions and countries are starting to support it, and the government is actively promoting it, especially in various industries we used to have a big problem, which is the problem of fiat currency deposit and withdrawal, especially after the small banks in North America went bankrupt in February and March this year. In essence, the few big fiat currency deposit and withdrawal Crypto-friendly banks in Silicon Valley have also gone bankrupt, so this is also a major difficulty faced by institutions in the whole industry. And now we also see that the Hong Kong government is making great efforts to force large banks in Hong Kong to do these innovations and welcome Crypto account opening, which is very rare.
So from this perspective, I think these policies in Hong Kong, including the innovation of some banks in Singapore, actually have a very encouraging effect on the industry. Because in North America, only very small innovative banks would try to do this business. But in Hong Kong and Singapore, it is actually at the policy level, with the government pushing these large banks to try and let traditional finance access blockchain. So from this perspective, I think it is a very positive signal. The two guests just mentioned that there is still a lot to learn and grow in the process of regulation and government interaction with the industry. Personally, I think this area will be handled relatively well because the Singapore government is actually a typical example. It has had significant contact with the industry since 17 years ago and has taken two to three years to see some growth in regulatory aspects and some policies that are more suitable for the industry. This time, the Hong Kong government has made a great effort, and we also look forward to further implementation of some policies that are more aligned with the industry.
Colin Wu: What do the three guests think of the future development prospects of Bitcoin inscriptions?
Geyue Sheng: I haven't really taken a serious look at it myself, but coincidentally I have a friend who is quite obsessed with it and he told me about it. After listening to him, I still didn't get why this thing is valuable or necessary. But he mentioned a concept at the underlying technical level that I think is quite unique, which is to issue NFTs on Bitcoin instead of ERC-20, because ERC-20 is used for tokens. If you issue NFTs, because of the structure of Bitcoin, it can give the NFTs a temporal concept. If there is a coin from the first block or the first 1,000 blocks, and I create an NFT on it, obviously it becomes very valuable.
Because it is difficult to obtain as a raw material for creation, and at this time, because these coins have some temporal nodes, it may coincide with some historical events, which may give the NFT a unique sense of history.
After listening to him, I may feel that this thing may be somewhat unique, but I didn't really get why it needs to be more expensive, have higher fees, and have longer transaction confirmation times. I think from a technical standpoint, it doesn't seem necessary if it is just about issuing tokens. There is no compelling reason why it has to be done on the Bitcoin blockchain. But I didn't do in-depth research, and I may have made some mistakes technically. This is how I currently feel.
Li Peicai: My point of view is similar to Ge Da's. I think the popularity of NFT on top of BTC will be slightly better. I think the reason is similar, I think the coins on ETH are actually written with contracts, so they can write a lot of things, but on BTC, in theory,
there is an upper limit, although the upper limit is very high, reaching 21 trillion, but anyway, especially because there are some halved bitcoins and some special bitcoins associated with them, I think it's still quite interesting.
I understand the rise of BRC-20 tokens because I think their issuance method may be more friendly to retail investors. They are fair minted, and the initial issuance price is also very low. Plus, the industry itself is looking for some new highlights. The success of BRC-20 in the IC0 year may have given everyone some good expectations. Plus, BTC itself is a big pool with hundreds of billions of dollars in market value, so a small market can be created when some overflow from this pool occurs. So I can understand this, but I haven't thought too clearly about the long-term value of BRC-20. Maybe it's easier to understand the NFT aspect of it. I still want to hear the opinion of the Fish God. This is roughly my point of view.
Fish God: There has been a small hot topic on Bitcoin, actually from a fundamental perspective. As Wu mentioned earlier, we see some developers clamoring and saying they don't recommend it, but in the core, we also see that these core developers can only clamor and not do much. So the Bitcoin network is actually a more decentralized and open network state. In this network, after it carries the concept of these rare bitcoins, it has done some inscriptions on these bitcoins, done some NFTs. It can better preserve and precipitate some classic artistic creations compared to other networks. So from this perspective, we actually see these rare bitcoins, and then many of these project parties and some genuine artists, they start hoarding these rare bitcoins and then release projects on them. It's actually the same starting point.
From this perspective, I think the development of Bitcoin inscriptions in the past few months actually has a relatively significant meaning. The wave of rapid speculation of BRC-20, in my personal opinion, is probably because the market or the entire market cycle has reached a low point without any topics, and everyone is relatively calm, so there is a need for some topicality and some breakout points. At that time, BRC-20 appeared and also brought certain wealth effects, which caused a wave of enthusiasm.
However, in the long term, such underlying technology is not suitable for issuance on the Bitcoin network. It may be more appropriate on the Lightning Network or other second layers of Bitcoin. Therefore, in terms of development, personally, I agree with the opinions of the first two guests. I think the issuance of this kind of token on the Bitcoin network may not be significant, because the Bitcoin network is not designed for this purpose. It was originally a peer-to-peer cash system. It's just that everyone is taking advantage of it and using some new features to barely make it work, but the user experience and gas fees are very expensive costs. On the other hand, in the NFT market, I think some classic works and artworks with strong collectible value on Bitcoin are more promising. So personally, I am more bullish on these special artworks on rare chains and have also accumulated some.
Colin Wu: Has Ethereum's ecosystem completed the dominance over public chains or infrastructure? And do other public chains have no chance?
Fish: I think the dominance of public chains or the technical roadmap proposed by Vitalik Buterin is something we can see. In the past, Vitalik has proposed many technical roadmaps that have not been implemented in the end. This industry is essentially based on the emerging and trial-and-error technical roadmaps from the open-source community, rather than defined top-down by one person or team, although some are discussed by developers and not defined clearly from day one. Therefore, it is uncertain who will finally dominate the technical roadmap and hold a monopolistic position. It still requires time and the market to choose. So I think other public chains, including some new innovations, still have opportunities. It is not in a final state yet, and recently there haven't been many interesting projects because the market is in a bearish state. However, there are some emerging projects that focus on the upstream and downstream of zk and some hardware acceleration in these areas, which may bring new directions and emerging profit opportunities to the POW field next year. There may be projects that accelerate Ethereum mining on the second layer.
Li Peicai: My point of view is that currently, ETH is definitely in a very leading position in the public chain track. However, this doesn't mean there is no chance for other aspects or for achieving overall domination. I think it's a bit premature to draw conclusions on this matter. Just a few days ago, when I was chatting with a friend, he mentioned the concept of regional public chains that they are currently laying out. It seemed reasonable to me because after Ethereum switched to POS, the cost of creating a public chain has become lower. POS can accommodate a relatively large number of public chains, and some big enterprise users with regional interests may choose to run on these regional public chains due to factors like regulations and policies. For example, the friendly regulatory policies in Hong Kong recently brought attention to CFX. Similar phenomena can be observed in India and Japan as well, where local governments and enterprises are willing to replicate their own public chains. Technically, I don't think it's very difficult, especially if they are just copying the performance of ETH. The existing ecosystem of DEX, lending, and DeFi can also be replicated. This is a topic I haven't deeply researched myself, but my friend has invested in many public chains before and shared his viewpoints with me. I partially agree with him, but I think further observation is needed. We need to see if ETH L2 can fully develop and solve the TPS problem during this bull market. Additionally, will there be new ecosystems on public chains, and will there be a higher demand for the performance of public chains? This morning, we also discussed another topic. During the DeFi Summer, when ETH became congested, many smaller public chains emerged, such as BSC. Even after the bear market, these chains still have users and haven't fallen far behind Ethereum. Although the TVL is still significantly larger on Ethereum, there doesn't seem to be a big gap in terms of active users.
Ge YuSheng: I think logically speaking, if we were discussing the grand topic of WEB3 today, there are various opinions on the number of blockchain users, but I think it could be around 200 million people. However, considering that there are 7-8 billion people worldwide, it is premature to say that Ethereum has achieved dominance. There is still a huge growth potential in terms of user adoption. Therefore, I believe that other public chains definitely have significant opportunities, although it may not be like the wave in 2017-2018 when people would recognize a project solely based on a whitepaper or without any revolutionary breakthrough in technology. Now, what matters more is whether a new blockchain can truly have applications and real users. This might become a crucial aspect in the competition among public chains, rather than just focusing on the technology itself.
Now, regarding the applications of blockchain, I can share some recent observations that are not frequently discussed within the community. People are asking, what is the "KILL APP" for blockchain? And I have a growing feeling that the "KILL APP" for cryptocurrencies may have already emerged, and that is stablecoins. Recently, we have seen a consistent decline in crypto trading volume, but the issuance of USDT (Tether) continues to increase. This is quite interesting because previously we thought that USDT primarily served as a medium for trading. Otherwise, why would I hold USDT? However, I've noticed during my recent travels around the world that many people are using USDT for cross-border remittances or international trade. It is especially common in the Middle East and even in places like Hong Kong. In fact, stablecoins, particularly USDT, have become the default currency for these remittance centers. Another interesting thing is that credit cards based on USDT are now very popular. These developments have a significant impact on the crypto community. Just imagine if it's a credit card, I would use it every day for my daily expenses, generating a large number of transactions. It is an application that integrates closely with my daily life. In addition, for international remittances and trade, using stablecoins, it's not just about investment and speculation. It's about using blockchain technology in daily business operations and trade. And it has a great advantage in quickly popularizing the blockchain infrastructure, such as wallets and exchanges, especially wallets, to reach those people who are not necessarily interested in investment and speculation. Because when you need to use a credit card or make a remittance, or when settlements are required between merchants, you would download a wallet and learn how to use Bitcoin. This wave, in a way, is not at the center of the crypto community's discussion, but it is rapidly spreading.
We can reasonably assume that in the next bull market, because of such an application, there will be hundreds of millions of people in the world who know how to use a wallet and how to transfer money to others, which will provide a solid foundation for the next bull market. And it will be much easier to develop things like SocialFi and GameFi because everyone will have a wallet. Furthermore, to some extent, this "KILL APP" will also determine the future use of which public chain, and whichever public chain is chosen will become popular. For example, look at TRON. USDT basically single-handedly sustains TRON, contributing a significant amount of transaction fees and profits, with a very large real trading volume on that chain. So I think the competition in the future supply chain will depend on this "KILL APP," and currently I am very optimistic about stablecoins becoming the next "KILL APP," becoming the ongoing "KILL APP."
Colin Wu: Do any of the three have any interesting stories to share from when they first entered the industry, to bring a lighthearted ending?
Ge Yuesheng: I'll share a story between me and Shenyu. Shenyu probably doesn't remember. The first time I mined using a GPU, sometimes I couldn't figure it out, and they said there was a master called Qicai Shenxianyu in the group who could help with parameter configurations. So I've known Shenyu for a long time, actually just as internet friends. He probably didn't even know my real name, just knew my username. This happened around the end of 2012, Shenyu is a true OG in the OGs, he was probably the first person in the mining circle back then, during the GPU era.
Li Peicai: On my first day of mining, it was really exciting. At that time, I saw the price of Bitcoin rise really high, but I was too scared to buy, so I thought about mining. But I entered the scene relatively late, so I couldn't mine Bitcoin anymore, I could only mine Litecoin. But the first thread I read was also by Qicai Shenxianyu. I remember very clearly that at the end of that thread, it said you needed to pay 50 RMB to see the content. That was also quite interesting. In the early days, the big shots also sold some paid services~
Audience Question 1: Usually, these financial tools are released by centralized institutions. I want to ask, after FTX's bankruptcy, many people have lost confidence in these things. Does this mean the risks associated with these things will be even higher?
Li Peicai: I think when it comes to financial management, the general principle is to match your risk with your returns. The benchmark for risk-free returns in the market is usually considered to be US Treasury bonds or the government bonds issued by each country. This is basically the benchmark for risk-free returns in all financial markets. For example, if you buy US dollars, the benchmark return would be around 5.5%. If you are capable of directly buying US Treasury bonds and you consider the return rate satisfactory, then that's also okay. The remaining task is to find a balance between the additional risks and returns you take on. For example, the returns from ETH staking may come from two sources. One is the appreciation of ETH itself. If you have a positive outlook on ETH and you want to buy it, then since you already bought ETH, do you want to benefit from the returns of holding ETH? I think the answer to this question is relatively simple for most people. It's like buying US dollars, and of course, you would want to earn interest from government bonds. But in order to earn this extra return, how much risk are you willing to take on? For example, you can go to the blockchain and stake ETH for STETH, if you trust that LIDO won't act maliciously. Since it's such a large project and millions of dollars' worth of Ethereum are involved, do you feel secure enough to stake your ETH there? If so, that's also an option. Another option is to trust Binance, right? If you think it's risky to keep the private keys yourself, you can store your assets on Binance. The risk here is certainly not zero, but it depends on how you evaluate it, right? So, I think it's a matter of finding a balance. In the end, you should make decisions based on your own risk assessment, similar to driving a car. Driving definitely has risks, right? The probability of getting into an accident per million kilometers driven is certainly not zero. But as long as you know and follow the traffic rules, and if you want to enjoy the freedom that driving brings, then I think you can bear these risks. That's my opinion. I don't think it's possible to control the risk to below zero. We can never achieve that.
Audience Question 2: I want to ask Shenyu, when do you think the NFT market will improve a little? Or what kind of opportunity can turn it from a bear market to a bull market?
FishGod: NFT market I think it's such a thing, it's a fast emotional cycle, and now because of some events, it's in a relatively negative state where everyone's emotions are underestimated. First, we have to get out of this state. In addition, the logic around the NFT market in the past two years is still some traditional collections and speculation. In fact, it still needs to find some application scenarios and usage scenarios for NFT, maybe some applications in GameFi, and then game props, and some offline rights and interests. These may also need some landing and exploration, so in the short term, a emotional cycle will come out, and some explosive products will come out, and then everyone's emotions will be ignited again. In the long run, we need to find landing scenarios.
I think this thing is valuable, especially when combined with traditional WEB2 or some traditional membership plans, it can clearly bring more incremental users, and it is relatively low threshold, you don't have to take it too seriously, you can easily convert it into native Crypto users. But now limited by the performance of the chain, the application scenarios, and the support of wallets, there are still some infrastructure improvements to be made in this area. I basically don't sell the NFTs I bought, they all go to zero, and then I get zero.
Audience Question 3: Can Bitcoin reach 100,000 by the end of this year? I've even changed my online name to "Rise".
Ge Yuesheng: Personally, I feel that there is no solid evidence to prove this thing, but I feel it will be in the first half of next year. When I first started sharing, I mentioned that before the start of a cycle, there is a high possibility of a crash, just like 312 in the previous bull market, but it will quickly recover and solidify a bottom, and then enter the next cycle. So the overall trend is upward, but it doesn't mean that this process will be smooth sailing or without difficulties.
Audience: I am fully invested in Bitcoin.
Ge Yuesheng: Wish you good fortune.
