Answer this fan's question, which comes from a fan's message.
Looking at the picture, the whole problem is to find a suitable reason for the current decline of Bitcoin. I heard that it came from a speech in a Space, but I am not sure who proposed these two viewpoints. But let me first give a summary. Basically, these two judgments are more imaginary than fans, and are similar to the Bitcoin main force dog market theory. They are excessive imaginations. It can also be seen that the friends who proposed these two viewpoints have only a superficial understanding of ETFs and miners. We will gradually disassemble and answer them, and try to use my personal knowledge reserves that may be involved.
Question 1: Although the Bitcoin ETF has been approved, institutions have not entered the market, and now it is all retail investors who buy it. This statement should be confirmed at present.
1. The Bitcoin ETF has been approved by institutions, and institutions have entered the market one after another. This is the truth. The buying and selling of the ETF market is indeed determined by retail investors because this is the trading mechanism of the ETF, but this does not mean that institutions have not entered the market.
2. After the Bitcoin ETF was passed, if I remember correctly, traditional financial institutions and banks have all participated in sectors related to the encryption field, from issuing financial derivatives to fund management, and even involving RWA, etc. This shows that institutions are actively participating in the encryption market. This is the effect brought by the Bitcoin ETF.
3. MicroStrategy, MSTR, a popular company in the cryptocurrency circle, has issued a large amount of company stocks for sale and increased its holdings of Bitcoin from before to after the Bitcoin ETF was approved. This is public news. Many institutions that have not been paid attention to are also increasing their holdings. I will not present the data here, you can check it yourself.
4. They believe that ETFs were not bought by institutions, but by retail investors. This conclusion is based on the fact that the rise in the short term was around 73,000, and the recent decline was relatively smooth. This makes many people think that institutions are cheating, and that they are not buying at the bottom, indicating that they are not involved. In fact, this is wrong. This view is drawn because the rise of Bitcoin did not meet these people's expectations, and the decline exceeded their expectations.
Traders who hold these views expect that once the ETF is approved, institutions will all come in to buy, and Bitcoin will rise to 100,000 or 200,000, and everyone will make money. However, this is not reasonable. Will institutions support retail investors?
However, institutions did not bottom-pick when the market fell. Many people expected them to bottom-pick. To be honest, institutions have a long-term vision. In their profit cycle, the difference between 70,000 bitcoins and 60,000 bitcoins is not that big. Even if they buy, they will buy continuously and not necessarily in large quantities at one time. There are also over-the-counter (OTC) channels. Therefore, institutions have obviously entered the market. However, many retail investors cannot keep up with the times and therefore cannot understand the actions of the institutions.
Question 2: In order to iterate their mining machines, miners will suppress the price of coins.
In order to upgrade their mining machines, miners will suppress the price of coins. This can actually be understood in two ways.
1. Mining suppresses the price of coins, which leads to lower profits for mining machines, forcing more mining machine companies to purchase new equipment to increase computing power and improve profitability.
2. Miners suppress the price of coins, thereby lowering the threshold for entering the mining team, and then sell a large number of iterative and outdated mining machines to the market.
explain:
First of all, although miners are the main output area of Bitcoin, since miners may not have a lot of tokens stored in their hands, they may not necessarily suppress the price of the currency.
Miners around the world sell a certain amount of Bitcoin to the market every day. The amount is very small, and it seems that there are only less than 1,000 Bitcoins. This cannot affect the price trend of Bitcoin. Secondly, in order to operate, pay electricity bills, labor costs, etc., Bitcoin mines need to be cashed out periodically, so this means that they cannot store a large amount of Bitcoin. At present, the global total output of Bitcoin per day is only more than 400. If you want to shake the market, you may need to accumulate for several months and then sell it all at once. Obviously, this is not in line with common sense.
Secondly, the coin price is the vested interest of miners. The higher the coin price, the more money they make. That is why they are worried that the coin price will fall. From this logic, if miners dump the market in order to sell mining machines, it is a bit like destroying their own rice bowl. Only a person with a serious mental illness would not do such a thing.
Finally, even if miners want to sell Bitcoin, they will choose a good environment, because this kind of drop from 60,000 to around 50,000 directly reduces their overall income. Why not choose an environment with good liquidity, and then sell in batches when everyone is actively buying, so as to make more profit? The pursuit of profit maximization is believed to be the core view of every businessman.
PS: I don’t have in-depth research on miners. If anyone needs to verify relevant data, you can ask questions. You are also welcome to make supplements.
Question 3: Combining the above two viewpoints, the conclusion is that the price of the currency will return to 35,000 yuan, and at worst, it will be 25,000 yuan.
1. Every time the market falls, there are always some people who come out and say that Bitcoin will return to 30,000 or 20,000. Last year, the most popular thing was that Bitcoin would be below 10,000, and some even said 5,000. What was the result? If you see a certain price position, you must provide relevant arguments. I often say, make bold assumptions and verify them carefully. It’s okay to make bold assumptions, but you can’t just make random assumptions. Give some basis for judgment.
2. People who understand the market should know that when the market was rising at the beginning of the year, a bunch of people shouted that Bitcoin would be 80,000, 100,000, 150,000, and 200,000. Various theories of washing hair inverted and eating shit frequently appeared. Just treat it as entertainment and don't take it too seriously. This kind of shouting is basically one's own subjective wishes and emotions rather than analysis.
3. Understand the transaction itself. The transaction itself is not about buying at the lowest price and selling at the highest price. It is not about accurately grasping the point and maximizing the benefits. These are all basic rhetoric to deceive the leeks. Imagine if it is so accurate and there is time to share it with everyone? Wouldn’t it be free long ago? Wouldn’t it be possible to buy out the market after a few rounds of such operations? And do you really believe that one person or a small team is more capable than a professional institution or consortium?
Understand your own expectations, consider your own profit cycle, and manage expectations. If you have 1 million and you want to buy Bitcoin, and your goal is to make a profit in 5 years, then in fact, whether you buy it at 50,000, buy it now or buy it at 50,000, in fact, there is not much difference. You have to know that your future expectation is 5 years, so just wait for the cycle to grow.
Of course, is it possible to get 30,000 or 25,000 Bitcoin? It is possible, after all, it is a probabilistic event, but how likely is it? At present, it is unlikely. After all, if these people are right, they will jump out and say that they are right. If they are wrong, they will remain silent or delete the content. They will not lose anything. However, if you miss out under the misleading remarks, how can you solve it?
At present, the probability of Bitcoin falling below 50,000 is assumed to be 50%, so the probability of falling to 40,000 may be less than 30%, and what about the probability of falling to 30,000 or 25,000? It is even lower. When we trade, we must consider the direction of high probability instead of betting on low probability. Low probability means betting on luck. If your original expectation is to buy Bitcoin and then make a profit in the future, you should honestly build a position gradually at a reasonable position and wait for the time period to harvest. If you want to gamble, then bet well, but you must understand whether you are a trader or a gambler.
PS：
I may be too lazy to make any pictures or data graphs on the weekend. If you disagree with any point mentioned in the article, you can leave a message in the comment area, or if you want to know about any data, you can brainstorm. I don’t want to look for information. Just take a look.
