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The Bitcoin bull market is back.
"Bitcoin is about to revolutionize again." Since April this year, Bitcoin (BTC) has been rising all the way.
Last weekend, on June 22, Bitcoin broke through the $10,000 mark, and since then, it has been like a wild horse running wild, with prices soaring all the way. Four days later, BTC's rise has not slowed down, breaking through $11,000 and $12,000 successively. So far this year, BTC has accumulated a 220% increase.
Although there is still some distance compared to the highest price of $19,875 in the bull market in 2017, BTC's daily trading volume and the total daily trading volume of the entire cryptocurrency market have broken through previous highs and set new highs again.
(BTC transaction volume)
"I made 180,000 in one month."
Some new entrants have invested one month's salary and have achieved a current return of over 150%; many more people regret not getting on board in time, and are afraid of missing out and chasing high prices, so they just hope that Bitcoin will "turn around" again to let them get on board.
Research institution OK Research believes that the Bitcoin market has entered a period of full recovery and is expected to usher in explosive growth in the excitement period after 4-6 months of volatile growth. And based on the long-term upward trend of Bitcoin prices and the current round of market demand amplification signals, this round of price peak is expected to set a record high.
All of a sudden, people who once did not believe in Bitcoin began to believe in it again; people who were short on Bitcoin came back to "recharge their faith"; the big guys who had disappeared came out to place orders again; and Bitcoin mining machines were in short supply again.
Lei Jun once said that the cost of trial and error is not high, but the cost of missing out is very high. It is precisely because of this reason that countless leeks entered the market when the price of the currency peaked.
As the saying goes: "You said Bitcoin was a scam when it was $3,000, but when it reached $10,000 you rushed to buy it..." As the price of the currency rose, people began to fall into a deep FOMO (fear of missing out).
As the Bitcoin bull market grows stronger, the investors in it are tested not on how deep their understanding of digital currency or blockchain is, but on human nature.
Leeks: earning hundreds of thousands of yuan a month, afraid of missing out and afraid of chasing high prices
As the cryptocurrency market recovers, retail investors are eager to board this train and find the road to wealth and freedom.
"I made 180,000 last month."
Investor Chen Yin told the media that by investing in cryptocurrencies , he has earned a total of 300,000 yuan in the past two months, and his excitement could not be concealed in his words.
There are many examples like Chen Yin, and many of them are new investors, commonly known as "new leeks entering the market" in the industry. Investor Zhang Ning is one of them. After learning about the surge in Bitcoin through Weibo in April this year, Zhang Ning invested one month's salary, and the current return rate has exceeded 150%.
"I don't know anything, I just invest blindly and make money." Zhang Ning said with a smile, "In this bull market, even a fool can make money, and I am that fool."
Those who got on the bus made a fortune, while those who didn’t get on the bus hoped that the bus would turn around quickly.
“When it reached 8,000 or 9,000 (US dollars), I thought it was too high. I didn’t expect it to rise to more than 10,000 now. I now hope it will pull back quickly so I can get on board,” said a retail investor who has been paying attention to the price of Bitcoin but has been hesitant to buy.
"I invested a little bit before, and now seeing it rise so much, I feel so sad." Miaomiao, a white-collar worker who studied Bitcoin this year and believed that it would rise sharply, started to invest in it several months ago. Now she feels sad that she bought too little and regrets not going all in (investing most of her assets in it).
Some people are happy for getting on the bus in time, while others regret getting off too early.
“I also got off the bus at 9,700 or 9,800. I felt like I was left in a parking lot and watched the bus drive away.” Wang Qi had planned to catch it when it pulled back. However, Bitcoin continued to soar and did not pull back as expected, so Wang Qi unsurprisingly “missed the opportunity”.
Fear of missing out, fear of chasing high prices, and even more fear of missing out. The FOMO mentality makes the new investors feel uneasy.
On-chain data shows that the number of newly added Bitcoin addresses has increased by 30.98% in the past seven days, and the number of active Bitcoin addresses has increased by 6.86% in the past seven days. This shows that the number of BTC investors entering the market and their activity are increasing.
Chris Kline, CEO of Bitcoin IRA, the largest Bitcoin individual retirement account (IRA) platform in the United States, said that as Bitcoin broke through $11,000, investor interest and investment activity in the past six weeks exceeded the previous year. The transaction volume of its IRA platform is at an all-time high and is expected to continue to grow.
According to The Tie Twitter, on June 22, the number of Bitcoin tweets exceeded 50,000, reaching the highest level since February 20, 2018. Baidu search index shows that the current search volume of Bitcoin is three times greater than the total search volume in the previous six months, which may indicate that the Chinese encryption market is hotter than the Western market.
The boss called out: Yuhong at three o'clock is back
After BTC broke through $10,000, the former "retired" cryptocurrency tycoons drove by with a "wealth freedom" banner hanging, and called on investors to get on board. Among them, the founder of the Three O'Clock Group, "Yuhong", stood out the most.
On June 20, XMX , a cryptocurrency launched by Hongyu , once again entered the field of vision of the cryptocurrency circle. On that day, XMX drew a big positive line, with an increase of more than 70%.
In the next few days, XMX founder Yuhong began to shout orders crazily in the community, sending group messages every day, and promised that he would build a position after XMX doubled five times.
As for why she opened a position when the price was 5 times higher, Yuhong explained: "It was determined by the size of my personal funds. I couldn't play if the market was too small."
However, in the eyes of investor Duan Hong, Yuhong's approach is to paint a big pie for the leeks. "He has a lot of funds, so he can gradually build up his position. There is no need to increase his position by 5 times. The reason for saying this is actually to paint a big pie, which is equivalent to a disguised promise that he will support the market."
Yuhong's orders were undoubtedly effective. XMX gained great attention with a 6-fold increase in the next 5 days, and Duan Hong also joined the game. However, due to his lack of trust in Yuhong, Duan Hong got out when he made 1 times the profit.
"XMX will never do market value management. Community mutual cutting is the only strategy for XMX market value management! Everyone is also welcome to cut me." Looking back at the group messages sent by Yuhong, it seems that the word "cut" is not avoided, because he has been labeled as "cutting leeks".
2018 was a year of heaven and hell for Yuhong. In the first half of the year, she switched from the Internet circle to the blockchain and promoted Yuhong to the altar by organizing the "Three O'clock Community". For a time, she received various reputations, such as "evangelist" and " first person in the blockchain community". In the second half of the year, Yuhong's project XMX was listed on the exchange and broke the issue price, so she was also called "leek cutter" and "swindler".
Mining machines are in short supply again. The leeks who want to buy coins are in turmoil, and retail investors who want to mine also want to start mining.
Kennen, the owner of a mining farm, clearly remembers that since April 2, when the price of Bitcoin began to rise above $5,000, his WeChat has been constantly inundated with friends seeking to buy mining machines and mining farm (mining) locations.
“WeChat has exploded with people asking about mining, and there is no way to reply. Among these investors, there are CEOs of various traditional companies with millions of dollars in their pockets who can afford to buy mining machines worth 5,000 or 10,000 units,” Kennen told the media.
Stimulated by huge demand, the prices of second-hand mining machines have been rising since April. The price of Antminer Z11 has increased by 8,000 yuan (47%), and old models such as Shenma Miner M3 and Antminer T9+ have been sold out. The orders for new generation mining machines from major mining machine manufacturers such as Canaan Creative and Shenma Miner have been scheduled until October.
"The current situation seems to have returned to the second half of 2017, when the market demand for mining machines was three times the supply." Steven Mosher, head of global sales and marketing at Canaan Creative, told the media.
Overnight, the craze for buying futures mining machines returned.
According to data from cryptocurrency data service company TonkengInsight, the continuous rise in coin prices has led to a significant reduction in the average payback period for new-generation mining machines. Previously, the average payback period for mining equipment was about 120-280 days, but by the second quarter of 2019 it had dropped to 60-150 days.
No matter how big or small the funds are, they don’t want to miss out on the profitable business. Since May, there has been no shortage of heavyweight players entering the mining industry.
Fidelity, a large asset management company that manages up to $2.4 trillion, announced that it will invest in Bitcoin mining and related energy industries. Fundamental Labs, an institution that has invested in unicorns such as Coinbase, Canaan Creative, and Binance Coin, also launched a $44.5 million (about 300 million RMB) first-phase fund for computing power construction during the same period. In the future, the fund will also raise funds in batches, with a total target size of $150 million.
If half of Fundamental Labs' first-phase fund was used to purchase S9 mining machines (the price was about 1,500 yuan at the time), 100,000 units could be purchased, equivalent to nearly 3% of the current total network computing power.
With the entry of new mining machines and the large amount of low-cost electricity supplied during the flood season, the computing power of the Bitcoin network has broken through historical highs one after another. Data from the mining pool BTC.com shows that since the price of the currency fell at the end of last year, the 14-day average network computing power of Bitcoin has once dropped to 36 million TH/s, and the computing power on the most recent day (June 25) was 65 million TH/s. In a few months, the computing power of Bitcoin has increased by 80%, which is equivalent to the addition of about 2 million new mining machines.
Blockchain startup passion revived
The leeks are gathering momentum, the big guys are calling for orders, and the entrepreneurs are setting up the game.
"We are preparing to launch the project before the bull market," Zhang Qing told the media.
Zhang Qing started to work on the "advertising + blockchain project" after withdrawing from the Internet project in early 2018. After the project white paper was ready, the blockchain industry took a sharp turn for the worse in mid-2018. "The industry entered a bear market, and two months later it entered the second half of the bear market." Capital and token funds all "fled." With no hope of raising funds, he and his team turned around and returned to the traditional Internet company.
But in April this year, the unstoppable price of cryptocurrencies rekindled Zhang Qing's entrepreneurial passion. He resigned from his Internet company and started looking for opportunities in the cryptocurrency circle again. In the process, he also brought in his good friend Apan, who had resigned from a token fund and was currently unemployed at home.
"I feel that the spirit of entrepreneurs has changed recently, and I have begun to have confidence in the industry again." Mandy, an entrepreneur who has been working in the industry since the last bull market, said with emotion, "I now also begin to believe that 'the market will always reward those who survive the bull and bear markets'."
Is this bull market different?
"I will never see Bitcoin worth $10,000 again." is the most exciting exclamation in this round of market. “I personally think that this BTC price increase is different from the bull market at the end of 2017.” A foreign Bitcoin believer wrote in his blog, “Now is a good time to buy BTC. We will no longer see BTC at $6,000, $8,000 or even less than $10,000.”
Such remarks may sound sensational, but they are now everywhere. Many people believe that this bull market is different from previous ones.
The first is the amount of funds.
An important reason for the last round of bull market was the wealth creation myth created by ICO, which attracted more people to enter the cryptocurrency field and new incremental (retail) funds entered the market. This time, many comments believe that the rise of Bitcoin is supported by institutions, which means that the rise of Bitcoin will be more stable and lasting.
The second is the value support behind it.
Currently, only BTC has returned to the bull market level, and other cryptocurrencies have not performed well. The rise of BTC alone reflects the degree of favor of funds for different currencies. As an asset or means of payment, BTC is gradually being supported by large financial institutions. Even foreign mainstream media believe that this rise in Bitcoin has valuable support.
A survey conducted by Kaspersky Labs in February 2019 showed that about 13% of people use cryptocurrency as a payment method. Coinmap data also shows that the number of businesses accepting Bitcoin has increased by 702% worldwide since December 2013.
Matt Greenspan, senior analyst at eToro, said, “The market has matured significantly since the last time Bitcoin broke $10,000. Given the current level of adoption, this rally makes more sense.”
Some analysts believe that geopolitical turmoil has further strengthened the status of Bitcoin as digital gold.
"Financial institutions and individuals have lost confidence in fiat currencies such as the US dollar, and are trying to find safe havens to store their funds. The traditional choice is precious metals such as gold, but in the past two years, Bitcoin has slowly entered the public eye. Despite its greater volatility, it is still seen as a safe and reliable means of storing value," Bitcoin believer Lucien Lecarme analyzed.
Data from coin.dance shows that weekly Bitcoin trading volume in Argentina continues to rise, reaching a new all-time high. This trend is not surprising in countries like Venezuela, which are in the same hyperinflationary situation. Cryptocurrency is needed more to achieve value storage. Logically, as the number of these people increases, mainstream society will gradually adopt cryptocurrency .
What shocked the technology industry the most was Facebook's issuance of currency.
Three things that happened this month directly and strongly brought digital currencies and their rise into the public eye: Facebook's launch of Libra and "Bitcoin breaks 10,000" becoming a hot search. Even people who don't pay attention to blockchain will accidentally see these news as long as they read books and newspapers.
Among them, the one that shook the industry the most was Facebook's Libra. Edward Moya, chief market strategist at Oanda in New York, said that the emergence of Libra validated the encryption space and pushed mainstream digital currencies to a higher position.
"My friend circle and the internet circle were all shaking." A BTG employee told the media. "The biggest pain that day was that I came from the internet industry. Before, I spent two or three hours explaining the use of blockchain to them . It was useless. When Facebook's Libra came out, they all started to understand the technical principles and why they were doing this. They were very touched. Although Libra is just EOS+USDT, I think it has a greater chance of success."
"Facebook is an Internet giant, and this event will be another milestone in the blockchain world," said Wang Binsheng, a distinguished professor at the Chinese Academy of Social Sciences who has participated in the design of business models and economic models for many tokens.
An industry insider commented on Libra, "Libra can be said to be the first time that the Internet industry or traditional industries have paid large-scale attention to blockchain after a year , and gradually everyone has a clear understanding: blockchain may not be able to transform various traditional scenarios, but it is definitely capable of transforming traditional finance. However, most of the previous projects were "copycats" and were far from mainstream finance. Now Facebook has taken the lead in establishing this project to achieve global value interconnection through blockchain, which has really made everyone more excited. If the world's money can enter digital assets with a very low threshold, it can definitely be considered a revolution."
Finally, this market situation is also inseparable from BTC’s internal design and its cyclicality.
According to the Bitcoin white paper, Bitcoin mining revenue is halved every four years, and the next halving is expected to occur in mid-May 2020.
According to the analysis of investment institution PanteraCapital, in the months before the Bitcoin reward halving in 2012 and 2016, the price of Bitcoin rose steadily, which was cyclical to a certain extent, with an average cycle of 348 days. This means that Bitcoin will usher in a new round of market on June 10, 2019.
As the halving is approaching, in order to catch up with this trend, some institutions and individuals choose to buy BTC in advance, which also drives up the price of the currency.
Dead cat bounce or real bull market, what’s more important is to hold on
Grayscale Investments, a US crypto asset management giant, has revealed its assets. The chart it released shows that Grayscale purchased more than 11,000 BTC in April 2019, accounting for about 21% of the global monthly supply of BTC. "Institutional investors are FOMOing (fear of missing out) on Bitcoin."
Today, the price of Bitcoin has exceeded 10,000, but OK research believes that the price has not yet stabilized in an "excited" state. It is expected to usher in explosive growth in the excited period after 4-6 months of volatile growth. And based on the long-term upward trend of Bitcoin prices and the current round of market demand amplification signals, this round of price peak is expected to set a record high.
Naeem Aslam, chief market analyst at ThinkMarkets, also predicted that in the next bull run, Bitcoin will reach $60,000 to $100,000. "The price points that need to be paid attention to are $20,000 and $50,000. In addition, Naeem Aslam pointed out that unrest and even potential wars in the Middle East are the biggest drivers of growth in diversified assets, including Bitcoin." He also said that this bull run is conservatively estimated to push the price of Bitcoin to an all-time high.
At the same time, some analysts have warned of risks. Bloomberg quoted Whitney Tilson, founder of Emire Financial Research, as saying that we should not be fooled by this year's dead cat rebound, and said that prices will be much lower in a year.
Charles Cai, senior analyst at OKex, believes that while holding cryptocurrencies , one should also pay attention to the risk of pullbacks.
"I once did a statistics on the bull market that started in 2015. The market rise lasted between 22 days and 220 days, with an average of about three months. During this period, there would be a correction of more than 30% almost every once in a while," said Charles Cai.
However, I believe that when the market switches from bull to bear, being able to hold on to things may be the best strategy.
“Although HOLD (holding coins) is the key to getting rich, there are only a handful of people who insist on regular investment,” Wang Qi reflected.
According to OK Research, the compound growth rate of Bitcoin in recent years is 83.75%. However, as Jiang Zhuoer, a veteran in the mining industry, believes: "Although Bitcoin has risen so many times, how many people can successfully buy low and sell high? It is difficult to hold the coin and successfully escape the top. Therefore, if you want to invest in Bitcoin, you can build your business on the coin, such as mining, over-the-counter trading, etc., and you can't just speculate on the coin." (Planet Daily)
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