Today, let's talk about the currency management perspective. Why should we not rush into projects that skyrocket in a short period of time in a bear market? Also, what kind of K-line trend is healthy? And for projects like Bald that increase 1,000 times in one day, do I have a chance to rush in before it increases 1,000 times again?
Why should we spend money on currency management, or why should high-quality project parties also do currency management?
There are two reasons:
1. We can find people who are really willing to hold for a long time. Only such people can push up the price of the currency in the long run. The logic of the previous rise in the price of the currency is as follows
Take Bitcoin as an example. The original price was only 0.02 US dollars. Zhang San sold it to you Li Si, and the transaction price was formed. At this time, the market had a perception that there was a privately issued currency, and the price was 0.02 US dollars. So, Li Sixiang bought some at the price of 0.02 US dollars. 1 million is about 20,000 US dollars.
However, the amount circulating in the market is relatively small, only 10 million, because there are only 500,000 people selling at $0.02, so it is impossible to buy it at this price. No matter how he shouts, no one sells. So, what to do? So Li Si offers a price of $0.03 and shouts an order on the exchange, and finally 500,000 are traded. In this way, Li Si bought 1 million bitcoins at an average price of 0.025.
Li Si plans to hold it for a long time and not sell it
Wang Wu saw that the price of Bitcoin had increased, and he also wanted to buy 1 million Bitcoins at the price of 0.03. However, no one was selling in the market, so the price could only rise to 0.04 USD. Wang Wu spent 30,000 USD.
If Wang Wu is also a long-term holder, then the price of the currency will most likely continue to rise. If Zhao Liu buys it and does not sell it, the price will continue to rise.
Several of these people are actually boosters of the Bitcoin price. They are actually sending money to Bitcoin. No one is making money. They are just making money on the surface, but they are not actually selling the coins. They just appear to be making money.
If these people want to make a lot of money, they must work together to drive up the price of Bitcoin. One day, they drove the price of Bitcoin to $30,000 per Bitcoin. They only need to sell 1 Bitcoin to make their money back.
Okay, now we assume that when Zhao Liu bought at the price of 0.05 bitcoins, Li Si sold at the price of 0.04, then the price of the currency would fall. If Li Si sold all 1 million bitcoins and left the market, this would be very unfavorable for the long-term rise in the price of bitcoin. The arbitrageur would have arbitrageured away the 15,000 yuan that caused the price of bitcoin to rise.
Therefore, in a bear market, preventing arbitrageurs and speculators from coming to speculate and arbitrage is the key for a project to manage currency value.
If Li Si repeats this routine repeatedly, creating negative news to make some people sell coins, then buying them himself and selling them again after a few days, then Bitcoin may never rise.
Second: Therefore, in a bear market, high-quality project owners must do one thing, which is to prevent speculators from coming to reap profits, to gamble with speculators, and to effectively block speculators and money from coming in. After these money comes in, they will run away after 2-3 days when they see that the coin does not rise.
Speculators who come in will only be anxious to get out. In a bear market, investors are more money-starved than investors, and no one is willing to hold on for a long time. It is impossible for project owners to give money to investors. Unless the project owner is a fool, but if we infer, a fool cannot survive until now, and should have been eliminated by the market last year. Therefore, the project owners who remain at this moment are most likely elites, who are smarter than ordinary investors, so they will not give money to these people.
Review of BALD’s madness and collapse:
BALD was launched on the Base chain on July 30 and quickly became a project of interest to on-chain speculators because BALD currently has the deepest liquidity on the Base chain. In just two days, its market value exceeded US$100 million and the liquidity scale in the fund pool exceeded US$25 million.
In the early days of BALD, the project deployer "BaldBaseBald" continued to add liquidity to the fund pool. In the first 24 hours of the project's launch, "BaldBaseBald" added 6,700 ETH of liquidity, worth more than 12.5 million US dollars. For a new chain that has just been launched and a newly launched Memecoin, such a large amount of capital is amazing!