I had the feeling that Trump’s speech early last night was just empty promises to us retail investors, without any substantial benefits.
The expectations have also been digested in advance. I thought that it might directly hit 7w based on the good news from Chuanbao, but it doesn’t seem to be the case at the moment.
If it hit 7w last night, then we can look forward. But it has not hit 7w yet, so we have to be cautious!!
Ethereum is about to usher in good news:
I would also like to talk about two important positives that are coming to Ethereum.
The first is the approval of Ethereum ETF staking. This could significantly increase demand for spot Ethereum ETFs. While an ETH staking yield of around 3.2% per year may not seem like much, the fact that ETH has a lower annual inflation rate and the benefits of staking may make ETH more attractive to some institutions than BTC.
According to the SEC commissioner, the Ethereum collateralized ETF “can always be reconsidered,” so its approval is only a matter of time.
The second positive is the release of Pectra, Ethereum’s next hard fork. This major upgrade is expected to take place in late Q4 of this year or Q1 of 2024.
Pectra will introduce several breaking changes:
1. Make Ethereum account addresses more programmable
2. Increase the maximum stake of ETH validators from 32 to 2048 ETH
By making Ethereum account addresses more programmable, Pectra will bring significant on-chain user experience improvements. For example, it will support sending transactions in batches, develop the wallet’s social recovery feature, and allow dApps to pay users for their gas fees. Experience upgrades are what cryptocurrencies need to achieve mass adoption.
How high can Bitcoin fly in this bull market?
Looking at Bitcoin over a 10-year span at the weekly level gives a very intuitive feeling. Over the years, BTC has grown in size and its pace has become heavier. The overall upward slope of each bull market has become lower. But without exception, there is always a wave of large-slope pull-ups in the last 3 to 5 months.
In this bull market, from the beginning of 2023 to now, Bitcoin has basically been climbing up step by step like a staircase. Overall, this round of bull market is a false start. We don’t speculate on the specific reasons. In the end, there is still a big slope increase at the weekly level/cycle of 3 to 5 months.
In each round of bull market, the capital structure that reaches the top is different. At the beginning, there was a small wave of awakeners, and then more and more retail investors rushed in, and then wealthy people and institutions from all over the world. In this round, traditional funds began to enter, and the recent entry of pension funds in several states in the United States is a signal.
So don't worry about insufficient liquidity in the market, retail investors having no money, etc. These are not problems. We don't need/cannot know the specific source of funds, we just need to believe in the laws of nature, and the final pull-up stage of this round of bull market will definitely come.
70,000 is a crucial barrier, breaking through this position is likely to start the second half of the bull market. The high point of this round of bull market is conservatively estimated to be 100,000 to 130,000 yuan, and if it is more broad, it is 100,000 to 150,000 yuan.
The current bitcoin price has been fluctuating for 4 or 5 months, which is long enough. We need an outbreak point to start the market and start the second half of the bull market.
Let’s take a look at what Trump released at this crypto conference that is good for BTC:
1. The first thing he did after taking office was to fire the current SEC Chairman Gary Gensler, believing that he was an enemy of encryption.
2. Announced the establishment of a BTC encryption presidential committee after taking office.
3. He will absolutely not support the emergence of central bank digital currency (CBDC), at least not during his term of office. CBDC will have a huge impact on stablecoins.
4. Trump does not think that BTC is the enemy of the US dollar, nor does he think that the emergence of BTC will threaten the US dollar. He believes that those who are hostile to BTC are regressing.
5. Believe that the United States is a BTC mining powerhouse and that everyone should hold BTC firmly, believing that this is the absolutely right thing to do.
6. Regarding BTC as a strategic asset of the United States, this is quite controversial. I don’t know if it is a translation problem. According to my understanding, Trump means to regard the existing BTC controlled by the United States as a reserve asset, not to make it clear that the US government directly buys BTC as a reserve. There is a big difference between the two.
Summarize:
Trump's speech was surprisingly conservative. The entire speech on encryption took more than ten minutes, and most of the "promises" he made were empty words, with more emotional significance than practical significance. The overall evaluation of the speech is just a daily vote-seeking + encryption slogan. It can drive the market emotionally, but it lacks practical significance, and the market may not really buy it.
The most optimistic scenario is that if this position is not broken before the Federal Reserve’s interest rate meeting next week, there is still a possibility of another wave of increases. If it is broken, even if the interest rate meeting announces a rate cut in September, it will be difficult for the BTC price to break through the 72,000 level.
Continuing with our view, if the BTC price fails to successfully break through and stabilize at 72,000 points at next week’s interest rate meeting, then BTC will begin to fluctuate and pull back next week (assuming there are no major positive events). As for whether it will be a volatile pullback along the upper track of the daily line or an overall pullback of the daily line, we can only wait and see after the interest rate meeting next week.
