This morning, BTC rebounded rapidly to 57k. If you didn't take advantage of the "extreme pull, long and short explosion" opportunity to buy at the bottom yesterday, the cost of adding positions today will be several points higher. Alas!
Market sentiment seemed to have reached a breaking point yesterday:
Someone posted a weekly chart, thinking that the weekly line had been broken, indicating a deeper decline. However, looking at the price hanging below the weekly line, it feels like a spring being pulled. The more it is pulled down, the stronger the rebound force will be.
Some people ask whether we have entered a bear market. In return, how do you define a bear market? If the bull market is defined as the period from the breakout of the previous historical high (69k in 2021) to the peak of this round of bull market, then we are undoubtedly still in a bull market now.
Some people are waiting to buy at the bottom and ask when to add positions. The answer is that for BTC, any time is an opportunity to buy. Don't be greedy and always want to buy at the lowest point. Buy in batches and hold for ten years.
Interestingly, yesterday's article "The Culprit of This Wave of Market Crash" attracted many fellows who suffered in the A-share market to pour out their grievances in the comment section. I took a look at the market and found that it had returned to 2,900 points.
Although most of the A-share fellows were only concerned with complaining, it was also found that quite a few of them were quite insightful. They thought of the transfer and financing from the negative impact of the short position of BTC futures contracts on the market mentioned in the article. They are really talented.
In fact, stocks are the company's own "money printing machine". Although there are laws and regulations, companies can still issue additional stocks in a legal and compliant manner, which is essentially "printing money".
Due to the characteristics of the financial market that transfers value across time and space, it is often the case that the "harvest" occurs in the bull market, while the "being harvested" is postponed to the bear market. This gives retail investors an illusion: everyone is making money in the bull market, and no one will blame the company for taking the opportunity to increase capital and "print money" during the good times. Once the bear market comes, the company will also take the opportunity to sell misery, lay off employees and cut salaries, and put the blame on the environment. Retail investors suffer serious losses, but cannot find who "harvested" them, and can only lament the economic cycle or blame the government.
In fact, the ones who harvested retail investors at 2900 points today are those companies that issued a large number of stocks in the bull market when everyone was making money. They took advantage of the good times to extract money from the market, but left retail investors swimming naked in the bear market.
If legislation stipulates that companies are not allowed to issue additional shares (only stock splits are allowed but not additional issuances), or even requires listed companies to repurchase and cancel a fixed number of shares each year, then stocks should be more friendly to retail investors.
The issuance of BTC is somewhat similar to such repurchase and cancellation rules.
At the beginning of 2009, 50 BTC were issued per block, and the annual issuance was 2.628 million. This is Phase 0.
Four years later, the issuance of each block was halved to 25 BTC, which is equivalent to repurchasing and canceling 1.314 million BTC each year. This is the first stage.
Satoshi Nakamoto's Hand of God repurchases and cancels 1.314 million BTC every year without spending.
Eight years later, the repurchase and cancellation efforts were intensified, with 1.971 million BTC repurchased and cancelled each year, and the issuance volume was reduced to 657,000. This is the second stage.
12 years later, the repurchase and cancellation efforts continued to increase, with 2.2995 million BTC cancelled each year, and the cancellation ratio increased to 87.5%. This is the third stage.
16 years later, the repurchase and cancellation efforts have continued to increase, with the annual cancellation volume reaching 2,463,750 BTC, and the cancellation ratio is 93.75%. This is the fourth stage we are in.
Comparing Phase 4 with Phase 3, how many more BTC are cancelled each year? The answer is 164,250.
A cycle lasts for 4 years. How many more BTC will be cancelled in the fourth phase? The answer is 657,000, close to 660,000.
The recent panic sell-off has the biggest negative news pointing to Mt.Gox’s liquidation and the German and American governments selling off their confiscated BTC. Someone on the Internet has compiled data on government holdings:
Mt. Gox (Japan): about 141,700 German government: about 43,000 U.S. government: about 211,000 British government: about 61,000 Chinese government: reportedly about 194,000 (data in doubt)
Even if all are sold, the total amount is only more than 660,000. This number is almost perfectly matched with the additional selling pressure of nearly 660,000 coins cancelled by the Hand of God in this cycle!
Regardless of whether they are thrown or not, the cancellation of God's Hand will not stop. The amount of 660,000 coins will be neutralized anyway. All of this was foreshadowed by Satoshi Nakamoto when he designed BTC in 2008. The production is halved, a stroke of genius.
If you are confused and don’t know what to do, click on my avatar or leave me a message.
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