Although Bitcoin is experiencing painful sideways fluctuations, it is still the best performing investment target this year. I will analyze why you should hold Bitcoin from a macro perspective and personal reasons. Chinese investors must read this!
Macro level
1. Interest rate cut cycle
The inflation of the US economy is coming to an end, and the market is sounding the horn of easing.
In early June, both the European Central Bank and the Bank of Canada cut interest rates by 0.25%, the first time since the outbreak.
Although the Fed said that whether to cut interest rates this year depends on economic data, this is a positive in itself. What he discussed was when to cut interest rates, not when to raise them.
2. PCE data
The PCE data will be released this week. The market expects the broad month-on-month growth rate to be 0 and the core month-on-month growth rate to be 0.1%.
This is a very good expectation. I personally think that as long as it does not exceed 0.2%, there is no need to worry.
As long as the Federal Reserve is not worried about inflation, in other words, as long as the Federal Reserve does not raise interest rates, it will be good for the second half of the year. If you don’t believe it, look at the performance of US stocks in the first half of the year.
3. Debt risk
At present, the debts of central banks in various countries around the world are at a high level. When there is a huge risk of a country repaying its debts, it will either default (which is extremely unlikely) or print money to prevent a debt crisis through currency devaluation.
Ray Dalio, founder of Bridgewater Associates, recently published an article in Bridgewater Select titled "Do You Hold Enough Non-Debt Currency?", stating that non-debt currency should be held, and explicitly stating that cryptocurrency is a type of non-debt currency that can hedge the risk of cash and bond depreciation.
4. Towards compliance
Bitcoin spot ETF, Ethereum spot ETF, Trump's support, and especially the passage of the Financial Innovation and Technology for the 21st Century Act (FIT21), are of great significance to Bitcoin, and its attributes as digital gold are becoming more and more substantial.
personal reasons
In fact, I didn’t want to invest in Bitcoin, but was forced to do so. Five years ago, I also had the dream of going long on China, and bought real estate and stocks. As you can guess, I lost money on stocks and houses. The only profitable investment was buying the US stock QDLL fund. Being in China, I can only make money by going long on other countries. Isn’t this ironic?
If you say you don't invest and hold cash in the bank, you are actually investing in a money fund in disguise. The interest rate on deposits cannot keep up with inflation. In name, the money has increased, but the purchasing power has decreased. Don't think that there is deflation in the country. That is a problem of statistical data. The real situation is that the things we can't afford are getting cheaper, and the daily necessities we can afford are rising in price.
A better way for ordinary people to preserve value is to buy gold, and Bitcoin is the only asset that I can see hope for in this era while living in China.
Another more important factor is that I have been tracking the Bitcoin on-chain data and analyzing previous Bitcoin cycles. I believe that Bitcoin is currently in a bull market cycle and is about to usher in a bull market. Friends who are interested in on-chain analysis can read my previous articles. If you agree with my analysis, please like it and leave your opinions. I will reply.
Summary: The above reasons are why I buy and hold Bitcoin. I expect a good market in the second half of the year. Of course, there is still a risk of economic recession, which will happen after 2025.
The above is my personal opinion, not investment advice
Investment is risky, so be cautious when entering the market
