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A new high for the year, how much can the 12-year-old Bitcoin rise in the future?

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This big move has only just begun.

Original title: "Creating a new high in the year, how much can the 12-year-old Bitcoin rise in the future?" "

Original Source: Planet Daily

According to Huobi, Bitcoin was released on October 31 It rose 2.23% daily, hitting a new high of 14099 USDT this year, and is currently consolidating and gaining momentum around 13885 USDT.

Will Bitcoin continue to soar before the end of the year? Why Bitcoin and Gold Are Reversing? Who Drives This Bitcoin Price Jump? Why do retail investors, institutions, and even the central bank get together to enter the market?

On January 3, 2009, Satoshi Nakamoto wrote in the Bitcoin creation block: "The Times 03/ Jan/2009 Chancellor on brink of second bailout for banks (January 3, 2009, the Chancellor of the Exchequer was on the verge of implementing the second round of bank bailouts)", Bitcoin at that time was still worthless; A round of fiscal stimulus measures in response to the epidemic is likely to be reached after the November 3 general election. At this time, compared with the $0.0076 when Bitcoin was born, it has increased by about 1.813 million times.

This article pays tribute to the ideals of Satoshi Nakamoto.

Price contains all information

Technical analysis believes that the Any factor - fundamental, political, psychological or any other - is actually reflected in its price. Based on this theoretical basis, let's start with the price trend of Bitcoin.

This article hopes to discuss the big market at the trend level, so the weekly line is chosen as the research unit. First, we identified trendline 1 (see chart below), which is defined by the 2017 high and the 2019 high. It can also be seen from the figure that the volume increased sharply in the week of July 26, 2020 (the small yellow circle in the figure), which also officially announced the official start of a big market. It is worth mentioning that this round of market has experienced some twists and turns due to the epidemic, and the breakthrough that was supposed to start in February was postponed; however, as BTC rebounded and broke through the horizontal resistance line 2, Bitcoin returned to its original trend. Trendline 3 and trendline 4 are important trendlines that we determine in turn according to market development. Trendline 3 has deviated far (but not unimportant), so we will focus on introducing trendline 4. In the week of October 18, Bitcoin officially broke through the trend line 4. So far, the weekly line is still above the trend line, and there is a short-term demand for stepping back; if it falls below the trend line 4, the lower trend line 3 will form further support. Generally speaking, from the perspective of the general trend, this round of big market has just begun. This kind of big market is also called the halving market in the currency circle.

Created a new high in the year, how much can the 12-year-old Bitcoin rise in the future?

Correlation reversal, who is behind it?

It may be too hasty for many people to talk about the big trend just by relying on a picture and a few lines. In the following, Odaily Planet Daily will further explore the deep logic behind the rise of Bitcoin. However, before answering this question, let's look at an interesting picture.

Created a new high in the year, how much can the 12-year-old Bitcoin rise in the future?

The trend of the candle chart represents the trend of gold, and the trend of the line chart represents the trend of Bitcoin trend. There is an interesting phenomenon and time node in it. We represent gold movements with yellow arrows and bitcoin movements with red arrows. We can find that Bitcoin has a strong correlation with gold from May to mid-September, but is generally weaker than gold; from September to mid-October, Bitcoin and gold are still strongly correlated , but at this time the trend of bitcoin began to be stronger than that of gold; from October 23, bitcoin and gold went out of the completely opposite trend, bitcoin continued to rise, while gold began to fall.

Why is there such a reversal? Who is the driving force behind it? We sorted out the following important events and data in reverse order:

On October 29, Eastern Time, Grayscale Bitcoin Trust’s holdings increased by 5191 BTC, and the total holdings It has reached 479,052 BTC;

On October 27, Eastern Time, Grayscale Bitcoin Trust’s holdings increased by 1,215 BTC, and the total holdings reached 473,140 BTC;

10 Eastern Time On October 26, Grayscale Bitcoin Trust’s holdings increased by 4414 BTC, and the total holdings reached 471,925 BTC;

On October 21, Eastern Time, Grayscale Bitcoin Trust’s holdings increased by 1,091 BTC, bringing the total holdings to 471,925 BTC. The amount has reached 466591BTC;

On October 21, PayPal stated that users will be able to buy, hold and sell cryptocurrencies through their PayPal accounts, and can be used globally About 26 million merchants shop. Initially, Bitcoin, Ethereum, Bitcoin Cash and Litecoin transactions will be allowed. In other words, since PayPal announced its support for buying Bitcoin, Grayscale has been buying like crazy.

The data may not be intuitive enough, so we roughly mark the time nodes of gray scale accumulation on the Bitcoin market chart, so that it can be more intuitive Feel the Bitcoin performance after Grayscale’s holdings increase.

Created a new high in the year, how much can the 12-year-old Bitcoin rise in the future?

It can be seen from the picture that as long as Bitcoin dares to fall, Grayscale will buy enter. And is Grayscale only a recent buy? No, it's just that buying has become more urgent recently (there is a taste of bargain hunting). Back on October 14, Grayscale said in its third quarter 2020 financial report that the company had inflows of $1.05 billion across all products. So far this year, the figure is $2.4 billion, more than double the total raised between 2013-2019.

In addition to Grayscale, are there other big organizations?

Of course, on October 8th, Square, a mobile payment giant with a market value of $86.6 billion, suddenly announced that it had invested $50 million in Bitcoin (BTC). Five days later, Stone Ridge Holdings, an asset manager with more than $10 billion in assets under management, revealed that it had purchased more than 10,000 bitcoins, worth about $114 million, as part of its asset reserve strategy. The NASDAQ-listed asset management company MicroStrategy announced last month that it has purchased a total of 425 million US dollars in bitcoin, making BTC the main holding type of its asset reserve strategy.

Are only institutions entering the venue?

On October 30, according to the local central media PressTV, Iran issued new regulations, led by the Ministry of Energy and the Central Bank, to promote registered miners to directly sell cryptocurrencies to Iranian banks , for commodity imports.

The buying of institutions and the central bank has attracted attention, and retail investors have not been absent. Glassnode data shows that the total number of wallet addresses holding at least $10, $100 and $1,000 in Bitcoin is approaching 31 million, an all-time high.

Great leap forward, just because of FOMO?

According to the data of oklink, we have intercepted the change chart of the number of bitcoin holding addresses since March this year. From the slopes of the three red arrows in the figure below, it can be seen that the growth rate of Bitcoin holdings in the market is accelerating, and it is currently in a period of faster growth. What is the reason for the great leap forward in the number of bitcoin holding addresses?

Created a new high in the year, how much can the 12-year-old Bitcoin rise in the future?

In October, Grayscale Investment released a report called "The Great Wealth Transfer Promotes BTC to Become a Mainstream Investment Target" research report, which mentioned that those who have invested in Bitcoin in the past four months Two-thirds of those surveyed said the coronavirus pandemic had influenced their decision to invest in Bitcoin. JPMorgan analysts found in August 2020 that the main reason some retail investors, especially young investors, choose to invest in Bitcoin is to cope with the market uncertainty brought about by the new crown virus epidemic.

When Paypal supported users to buy Bitcoin on October 21, it also made it clear that it was because central banks and consumers of various countries showed interest in digital currencies during the new crown pneumonia epidemic. Strong interest in launching this service.

The great migration of wealth, the underlying logic of Bitcoin’s rise

If more people choose Bitcoin is only due to the market uncertainty brought about by the new crown epidemic, so after the new crown epidemic is over, will Bitcoin plummet immediately?

In fact, although the epidemic has brought many changes to the world, it is difficult to stop and reverse the general trend, it only speeds up or delays to some extent Something happened, and this has happened many times in human history. And the big trend this time is the digital age, and humans (and wealth) are beginning to migrate to the Internet. This epidemic has only accelerated this process. Specifically, it can be viewed from two major aspects.

On the one hand, the central banks of various countries released a lot of water during the epidemic, making the already risky traditional financial system even more precarious. This year, it only took two months for the United States to expand its balance sheet by more than 2 trillion U.S. dollars; the size of U.S. debt has also rapidly expanded to 27 trillion U.S. dollars. As of the end of last month, the Federal Reserve's budget deficit had reached 3.1 trillion U.S. dollars, three times compared with the same period last year; this time the fiscal deficit hit a record high in 11 years. Not only that, the budget deficit as a percentage of GDP hit a 56-year record high of 16%. As the overlord of the global financial system, the U.S. dollar has such a high risk that it is hard to return. This not only makes ordinary people worry about turning to digital currencies, but also makes central banks of various countries step up the development of their own digital currencies and try to form a new financial system. payment system, and the digital financial system is undoubtedly the best alternative.

On the other hand, it is mainly the development of digital finance itself. In addition to the digital financial exploration of the traditional financial system, decentralized finance (DeFi) has also achieved very rapid development this year. Decentralized lending Compound, decentralized trading platform Uniswap, the year's biggest dark horse Yearn.finance, etc. A large number of DeFi have emerged, and the total lock-up volume of DeFi has also increased by about 20 times compared with the beginning of the year. This series of financial innovations jointly contributed to the DeFi boom, successfully migrating the original centralized financial facilities to the blockchain. The development of this round of DeFi is by no means an epidemic. These applications are essentially driven by technology and products Financial Innovation.

The figure below is the change of BTC lock-up volume anchored in DeFi. It can be seen that the lock-up volume of BTC continues to increase with the development of DeFi , and the time when the amount of locked positions increased significantly began in July, and more than 100,000 locked BTCs were added in just three to four months. This endogenous force of the blockchain is very powerful and should not be ignored. Combined with our initial technical analysis trend chart, the time point when Bitcoin really went from bear to bull was also in July. This is by no means a simple coincidence, but the development of DeFi has promoted the arrival of the bull market to a certain extent, and the epidemic has accelerated its development on a broader scale. Institutions entered aggressively after realizing this digital trend that cannot be ignored.

Created a new high in the year, how much can the 12-year-old Bitcoin rise in the future?

The ideal of Satoshi Nakamoto

In this round of bull market driven by DeFi (currently only at the beginning), Ethereum has further established its dominance of the underlying application platform among many competing public chains, and more talents and more applications have begun to gather Here; and Bitcoin has further established its blockchain's "gold" status among many competing currencies (such as BCH, BSV, and LTC, etc.), more and more funds choose to flow to Bitcoin, and Bitcoin is also becoming more and more popular. Value is given in many DeFi.

With the gradual improvement of the blockchain infrastructure this year, more blockchain applications will begin to explode, and the demand and value of Bitcoin will also increase growth of.

On November 1, 2008, Satoshi Nakamoto proposed in the Bitcoin white paper to establish an electronic cash system completely realized through peer-to-peer technology, making online payment possible It is directly initiated by one party and paid to another party without any financial institution in the middle. At the time, this was still very impractical, and Bitcoin was repeatedly questioned.

On January 3, 2009, Satoshi Nakamoto wrote in the Bitcoin creation block: "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks (January 3, 2009, the chancellor was on the verge of implementing a second round of bank bailouts)", when bitcoin was worthless; and now, a new round of fiscal stimulus measures in the United States in response to the epidemic It is possible that it will be reached after the general election on November 3. At this time, compared with the $0.0076 when Bitcoin was born, it has increased by about 1.813 million times.

As humans (and wealth) begin to migrate to the Internet, the traditional financial system is gradually being deconstructed, The decentralized finance in the blockchain is beginning to reconstruct the financial system of the world, and the ideas mentioned by Satoshi Nakamoto in the white paper are getting closer.