Why do I think BTC in 2020 is not as crazy as in 2017?

Why do not a few cryptocurrency enthusiasts think that this bull market is over?

The most intuitive feeling is that the BTC trend in 2020 is too similar to that in 2017.

First, in both 2017 and 2020, crazy increases started at the end of the year;

Second, there were large corrections in January 2018 and January 2021;

Third, in January 2018 and January 2021, there was a situation where other Altcoins, represented by Ethereum, rose.

Therefore, some coin friends believe that 2020 is 2017, so this round of bull market has ended.

❖Comparison❖

➤ 2020 vs 2017

Xiao Mie compared the increase of BTC in 2017:
Taking the opening price as the standard, on January 1, 2017, the opening price of BTC was 963.66 USD, and on December 31, 2017, the opening price of BTC was 12,897.70 USD. We are not counting the highest values, but from January 1 to December 31, the price of BTC increased by 13.384 times.

If we consider the increase in the issuance of Bitcoin and compare the market value of Bitcoin, we will not compare the highest value, but the value on January 1, 2017 and December 31, 2017. On January 1, 2017, the market value of BTC was 16,050,407,461 USD, and on December 31, 2017, the market value of BTC was 237,465,823,980 USD. In terms of market value, BTC rose more in 2017, by 14.795 times.

Let’s look at BTC in 2020.

On January 1, 2020, BTC opened at $7,194.89 and had a market value of $130,580,829,150.

On December 31, 2020, BTC opened at $28,841.57 and had a market value of $539,051,138,108.

On December 31, 2020, the opening price rose to 4 times that of January 1, 2020, and the market value was 4.13 times.

By comparing like this, you can find that the madness of BTC in 2020 is simply incomparable to that in 2017.

➤ 2020 vs 2016

According to BTC’s 4-year cycle, BTC’s 2020 should correspond to 2016 rather than 2017. Let’s compare BTC in 2020 with 2016.
On January 1, 2016, BTC opened at $430.72 and had a market value of $6,529,299,589.
On December 31, 2016, BTC opened at $960.63 and had a market value of $15,492,554,222.
On December 31, 2016, the opening price increased by 2.23 times that of January 1, 2016, and the market value was 2.37 times.

So we found that BTC seems to be in an awkward situation in 2020, with a greater increase than in 2016, but it has not reached the level of 2017.

➤Introducing U.S. stock factors

Perhaps, some coin friends think that the acceleration of BTC's rise will become slower and slower, so they think that BTC in 2020 will be equivalent to 2017.

But we have overlooked one factor, which is the impact of the US dollar's quantitative easing. The continued release of US dollars has an impact on the BTC price.

On the one hand, because the BTC price we are talking about is denominated in US dollars, when the US dollar continues to be released, the nominal price of BTC expressed in US dollars will naturally rise.

On the other hand, as the US dollar is released, people's expectations are affected, so the scarce BTC and gold will be affected by expectations, so more hot money will flow in, pushing up the price of BTC. On this basis, some short-term speculators will join in, so the price of BTC is even higher.

what to do?

Little Bee introduced data from US stocks for comparison.

Data source: https://siblisresearch.com/data/us-stock-market-value/

On December 31, 2015, the ratio of BTC market value to the total market value of U.S. stocks was 2.58 per 10,000.

On December 31, 2016, the ratio of BTC market value to the total market value of U.S. stocks was 5.66 per 10,000.

On December 31, 2017, the ratio of BTC market value to the total market value of U.S. stocks was 73.73 per 10,000.

On December 31, 2019, the ratio of BTC market value to the total market value of U.S. stocks was 105.09 per 10,000.

After introducing U.S. stocks, let’s compare the changes in the value ratio of BTC to the U.S. dollar.

In 2016, the ratio changed to 2.19 times.

In 2017, the ratio changed to 13.03 times.

In 2020, the ratio changed to 1.42 times.

If we ignore other factors and only look at the price and market value, BTC in 2020 will be even crazier than in 2016.

However, after introducing the U.S. stock factor, that is, taking into account the impact of inflation on speculation, we will find that BTC growth in 2020 is actually slightly lower than that in 2016, which is in line with the law of decelerating growth.
So, do you think the BTC price trend in 2020 will be more like 2016? Or more like 2017?

As a growing financial asset, it is normal for BTC to accelerate at a decreasing rate. However, by comparing it with the US stock market, we can find that the growth rate in 2020 has decreased to a certain extent compared with 2016, and is almost incomparable with 2017.

Therefore, the little bee believes that BTC in 2020 is not as crazy as in 2017.

The madness we see is the impact of the increased dollar printing.

On December 20, 2020, the United States released another $900 billion economic stimulus bill.

Let’s take a look at BTC’s performance from December 2020 to the present. Around December 16, it started to rise at a more accelerated rate.

The economic stimulus bill passed on December 20 should have been proposed before the 20th.

Therefore, the reason why we see BTC rising wildly may be different from that in 2017. In 2017, it was the result of the main market pull, while in December 2020, it may be the stimulus effect brought about by the massive release of US dollars.

Of course, this stimulus effect is also limited. BTC has been rising for too long, and has switched from rising in large volume to rising in small volume.

There are not too many sell orders, nor too many buy orders. Without chasing the rise, the banker will certainly not pull the market. The market will pull back and enter consolidation.

But Xiao Mifeng thinks that the madness that originally belonged to the BTC market, which has a four-year cycle, such as the madness in 2017, may not have arrived yet.

❖Written at the end❖

Finally, I want to add that although the new $1.9 trillion economic stimulus bill is on the way, I am afraid that more of this money will flow into the real economy.

The market may continue to be cleaned up in the future.

A coin friend posted a message on AEX, which made Xiao Mifeng very emotional:

We must not let the market situation influence our emotions. We cannot think that the bull market is over because of a pullback, nor can we think that the bull market is back completely because of a rise.

This washboard market makes us be washed back and forth on the washboard. It really hurts, but we must stay calm!

I think if the bull market is over, the price of $30,000 will not be stable and will fall soon. If it is stable, it will not rise quickly. On the one hand, funds will flow into the real economy, and on the other hand, BTC takes a long time to rise, from $20,000 to $40,000, which took only about 21 days. The consolidation time will not be shorter than this time, but only longer than this time.

Moreover, from consolidation to bull market, it also takes a slow bull market process.

I still say the same thing as Little Bee, we should not be pessimistic about the Bitcoin market, but we should not be too optimistic either.

The above content is one-sided and personal opinion.

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