A few days ago, Federal Reserve bigwig Powell spoke up, saying they cannot touch Bitcoin. As soon as this was said, Bitcoin immediately fell from a high of 108,000 to 92,500. Today, another bigwig from the Federal Reserve, Daly, came out and said that cryptocurrencies cannot be compared to gold and are far from truly becoming 'money.' Daly believes that cryptocurrencies should be viewed separately and should not always be tied to gold. She said that cryptocurrencies are quite complex and need to be studied properly before defining them. She also mentioned that cryptocurrencies can be money, can be trading tools, or can be assets that sometimes rise and sometimes fall like stocks, but they simply cannot be said to be like gold. Daly's view is somewhat different from Powell's. Powell previously said that Bitcoin is like virtual gold, used for speculation, and cannot be used as money because it is too unstable. Although Daly agrees that cryptocurrencies cannot be used as money yet, her explanation is more detailed. Daly explained that for cryptocurrencies to become true money, their value must grow along with the economy and cannot rise simply because people want it to. Just like the dollar bills, their price does not rise just because more people are using them; the value of the dollar depends on how fast our economy grows compared to other countries. For cryptocurrencies to be considered money, they need to develop this characteristic first. Although the road for cryptocurrencies to become money is still long, this does not stop everyone from speculating on them. Since Trump was elected, Bitcoin has skyrocketed, surpassing 100,000 on December 4th. Stocks related to cryptocurrencies are also soaring quickly. Now, even some bigwigs who usually only buy stocks and bonds have started buying cryptocurrencies. Trump's new administration has even specifically sought out a venture capitalist named David Sacks to manage cryptocurrency matters, and perhaps the U.S. will even establish a Bitcoin reserve in the future. In short, cryptocurrencies are currently incredibly popular, and everyone believes they have limitless potential. An analyst even predicted that by the end of 2026, Bitcoin could rise to 225,000 dollars. It seems that more and more bigwigs are optimistic about Bitcoin, which is definitely key.

Is the market crash in a bull market actually a "washout" strategy? Here are the insider tips you need to know!

Although the bull market seems prosperous, have you noticed that there are occasional waves of sharp declines? Don’t worry, this is not a market crash, but rather a "washout" quietly taking place!

🌪️ Why do sharp declines frequently occur in a bull market?

Many of you may ask: "Shouldn't a bull market be all about rising prices? Why are there still sharp declines?" In fact, these declines are not market collapses, but the market is "cleaning out" retail investors!

In a bull market, many retail investors tend to follow the trend and have a strong holding mentality with high trading stickiness. If a portion of them isn’t washed out through sharp declines, the main players would have to spend a significant amount of capital to push up the price, as retail investors would quickly sell off once they make a profit, creating huge market pressure.

🔥 What exactly does "washout" mean?
In simple terms, the main players use sharp declines to force retail investors to cut their losses and exit. Once these retail investors leave, only the main players with large capital remain in the market, allowing them to easily control the price and further push it up, making huge profits. Conversely, retail investors are eliminated in this process, becoming the "sacrificial victims" of the market.

💰 Why is it necessary to clean out retail investors?
It sounds a bit cruel, but this is the brutal game of the market. Without this round of "washout," the main players would face enormous resistance when pushing up prices. Retail investors, having made a small profit, would choose to exit, resulting in the main players losing the money they could have earned while pushing up prices to retail investors.

Therefore, by washing out retail investors through sharp declines, the main players not only increase their profit margins but also make future price increases smoother.

🎯 To summarize:
So, when you see waves of sharp declines in a bull market, don’t rush to panic. This is likely the market preparing to wash out and set the stage for subsequent price increases. And those steadfast investors who resist the urge to sell often end up earning even more later on.