#美国5月核心PCE物价指数年率增幅创2021年3月以来新低 #Meme板块普涨 #美联储何时降息？
Many people have the feeling that the money-making effect of this bull market is not obvious. It is rare to see the kind of tenfold or hundredfold increase like in the previous bull markets. It is even rarer to see thousands of coins rising together and a sunny market. It seems that this bull market is only a bull market for Bitcoin, and even the performance of the second-place Ethereum is relatively poor.
The recent market situation is even more disappointing. Bitcoin has been fluctuating for three months, and small currencies have not risen at all. One is worse than the other, and some are almost falling below the ankles.
Many people lamented that the good times in the cryptocurrency world are gone forever and it is becoming increasingly difficult to make money.
Why is this?
Let's first analyze how the bull market is formed:
If an investment product wants to increase in value, you must have funds to buy it.
So why would investors buy it? It must be because they expect it to rise.
And the funds bought it, and then it did go up, and the increase attracted more funds to come in.
Then the price keeps rising higher and higher, more and more funds flow in, and a bull market is formed.
Why does it feel like a tongue twister?
Let’s first go back to the reason why funds buy it. Is there any expectation of rising prices?
Yes, the expectation that the cryptocurrency world will have a bull run every four years has been verified several times, and it can be said that a broad consensus has been formed.
Why must it be 4 years? This is because the reward for Bitcoin mining is halved every 4 years. Fewer coins are mined, which means a decrease in supply. Assuming the demand remains unchanged, an increase is inevitable.
However, this logic made sense in the last few rounds of bull markets, because the total amount of Bitcoin was relatively small at that time, and more coins were mined each year, so halving would lead to a significant reduction in supply. But now that basically 90% of the coins have been mined, this reduction is actually nothing.
But expectations can sometimes be self-fulfilling.
Everyone thinks that there will be a bull market in four years, so some people will use real money to buy it. After the purchase, the price of the currency goes up, and even those who don’t believe it will believe it.
This round of bull market is of course not only about the expectation of Bitcoin halving, but also the expectation of the approval of Bitcoin ETF. This means that traditional capital has a formal channel and can buy Bitcoin more conveniently, which will bring in a large amount of new funds and of course open up room for imagination for the rise.
Now that there is an expectation, does that mean there will definitely be a bull market?
uncertain.
You have to buy it with real money.
If you just think about it but don't do anything, can you rely on your mind to move the market?
Is there any new capital coming in?
Before and after the Bitcoin ETF was passed, there was indeed a large amount of new funds purchasing Bitcoin, which is also an important reason for the rise of Bitcoin.
But why is it that other currencies, except Bitcoin, perform so poorly?
An important reason for this is the lack of liquidity at the macro level.
The timing of the Fed's interest rate cut has been delayed again and again, and capital speculation on the Fed's interest rate cut has been repeatedly disappointed. Good news has not come yet, and everyone is disappointed.
Moreover, the interest rate has not been lowered, and no more funds have been released. Isn't it good to hold risk-free bonds with an annualized interest rate of 5%? Why take risks? If there is insufficient funds, it will not last long if you just rely on empty promises.
Another reason is that there are no new stories to tell in the market. In the last bull market, concepts such as DeFi, NFT, GameFi, DAO, cross-chain, second layer, and metaverse emerged one after another. Stories will naturally attract capital speculation. However, this bull market did not create much waves except for inscriptions, and even AI was just a wave.
Without any hot spots, the cryptocurrency circle started to hype up meme, a pure air coin. This shows how lacking concepts this bull market is.
Although there are not many concepts in this bull market, the number of newly listed coins has not decreased. In previous bull markets, there were more funds and fewer coins, while in this bull market, there are less funds and more coins.
Many coins were valued at hundreds of millions or even billions of dollars when they were first listed on exchanges, and they are still being unlocked. With so many coins being thrown out continuously, and not enough funds, retail investors can’t take them, so a decline is inevitable.
So is it possible for small currencies to explode?
Many big Vs say that small currencies may not be able to survive in this bull market, and there will no longer be a copycat season like before.
Indeed, with the approval of ETFs and the entry of traditional capital, this bull market may present a different situation from before.
In the past, the cryptocurrency industry was small in size, and almost all of it was played by retail investors, and big capital basically looked down on it. However, with the increase in institutional investors in this bull market, especially the influx of traditional financial capital represented by BlackRock, it will greatly increase the difficulty for retail investors to make money.
Institutional investors tend to pay more attention to the safety of funds, and only consider the rate of return. For this reason, they will choose BTC and ETH with large market capitalization as the key allocation objects, rather than the altcoins with higher risks. Even if a small amount of money is invested in altcoins, they will tend to invest in some altcoin funds rather than the altcoins themselves.
Furthermore, institutional investors are much stronger than retail investors in terms of capital size, information sensitivity and trading techniques. In addition, they can also use various financial instruments to hedge risks. Naturally, retail investors are not at an advantage in the competition with them.
Another important point is the change in the regulatory environment. The regulation of cryptocurrencies is being strengthened worldwide, especially the crackdown on ICOs and altcoins. This makes institutional investors more inclined to choose well-known cryptocurrency projects in order to avoid risks.
But I feel that there will still be times when demons will rampage, but the spring of the village has not yet arrived.
Why do we say there must be a copycat season?
In the late stage of the bull market, Bitcoin no longer has a wealth-creating effect. Funds will choose altcoins because altcoins are small in size and easy to pull up, creating a wealth effect and attracting retail investors to take over, making it easier to sell. In the late stage of the bull market, people generally want to make quick money and gradually lose their rationality. They often buy whoever rises and whoever rises the most. The bull market ends in madness, and the last madness must be the madness of altcoins.
The bull market is still going on. If you are not sure how to position yourself, you can find me through the pinned articles. I am willing to share my experience and strategies with you, just for like-minded people! Let's get rich together!!