A question I've been thinking about recently, which I find very interesting, and I want to share it. The following text has some data references, roughly including the following points.
1. Difficulty of participating in the market
2. The regular army in the market
3. Horizontal comparison of the entire capital market of the subject
My conclusion is that the dividends still exist, but they are disappearing at a visibly rapid pace. There is not much time left for the younger generation. Next, I will discuss the above three points.
1. Difficulty of participating in the market (from my own trading perspective):
I tweeted last year pondering how the kind of bowing trend shown in the following picture would eventually operate. The reason for my contemplation is that this kind of trend has never appeared in past Bitcoin cycles during an upward trend.
And there is also a situation that has never occurred, which is a long-term oscillation lasting 7 months during an upward trend.
The emergence of these situations will greatly increase the difficulty of trend trading. As a comparison, you can refer to the historical K-line of Bitcoin on BITSTAMP, and see how Bitcoin rose during each wave from 2013 to 2021. Was it easier to trade during previous trends or now?
(Some friends might say, can't we do grid trading instead of trend trading, or do oscillation trading? Then I can only say that based on historical data from the past decade, Bitcoin has always been a quality trend subject, and this is mutually exclusive to subjects suitable for oscillation trading. If you insist on doing the opposite, I won't stop you.)
2. The regular army in the market
Which ones are the regular army in my eyes?
1. Firstly, the approval of this BTC ETF indicates that traditional capital's regular army has officially entered the market. This is also something I have been reminding in my tweets recently: 'Before a real black swan appears, do not overly price in risks, because Bitcoin can really be bought out. The circulating supply of Bitcoin is very limited.'
2. Professional hair-pulling teams, there are now teams of a few people, dozens of people, and hundreds of people, all with industrialized processes. Retail investors pulling hair themselves is like trying to fight against the industrial revolution with manual labor. There will definitely be individual hair-pulling soups, but don't think about getting rich quickly. It's like the so-called artisan spirit we have now, right? Hahaha
3. Professional market traders, now in addition to trend traders like me, there are more and more oscillation traders, news traders, and new issuers, all becoming increasingly professional. The easy money in the market is becoming harder to come by. As a newbie, you will see only two situations: either very low, almost free profits, similar to trading new tokens on exchanges, or significant losses that take your principal.
4. Assembly line style cryptocurrency projects, especially VC projects. In the past few years, including the last bull market, retail investors participating in new projects actually had excess returns. Back then, whether it was DeFi, NFTs, games, or even ICOs in 2017, or new issuances at that time, it was very easy to make money, and the returns of each project were almost impossible to quantify, with profits being random, and everyone was growing wildly. Now, however, as VCs become increasingly involved, projects are becoming more formulaic, listing has become a standard process, and even hair-pulling individuals are becoming more professional. Consequently, the mispricing of value in the market will be corrected at lightning speed.
(Of course, people in the cryptocurrency circle are also self-rescuing, such as the popularity of memes, etc., which are all good phenomena.)
3. Horizontal comparison of the entire capital market of the subject
I discussed this point multiple times in the middle of last year. At the current moment when Bitcoin breaks historical highs, it can still be brought out for comparison.
That is, Bitcoin's increase this time has not outperformed the technology subjects of the traditional capital market, which is the biggest failure.
The lowest point of Bitcoin in 2022 was calculated at 15000, and the recent highest point was calculated at 75000, which is a 400% increase.
So I listed the American tech giants from 2022 to this recent peak, and everyone can compare to understand.
NVIDIA 108.05 - 974 Increase 801%
META 88 - 531.49 Increase 503%
Tesla 101.81 - 299.29 Increase 193%
Amazon 81.69 - 189.77 Increase 132%
Microsoft 210.57 - 430.82 Increase 104%
Google 83.34 - 174.71 Increase 109%
Apple 123.32 - 199.37 Increase 61%
If you want to ask, besides NVIDIA and Facebook, haven't the others seen an increase in Bitcoin? Then I can only say, how big is the difference in risk? Who dares to go all-in on big American tech stocks and bet all their assets on them? Besides believers in Bitcoin, who else dares? In fact, what truly makes me feel that this market is not young anymore is the comparison with several stocks that are strongly correlated with Bitcoin, as follows.
Microstrategy 132.56 - 1999.99 Increase 1408%
Coinbase 31.55 - 283.48 Increase 798%
Mining stocks:
MARA 3.11 - 34.09 Increase 996%
CLSK 1.74 - 24.72 Increase 1320%
Bitcoin has completely underperformed compared to its strongly correlated traditional capital market subjects, which is very frustrating.
However, as a trader, I have to think about the future. If I want to invest in Bitcoin, should I buy shares of Microstrategy, which has the most prestige in Bitcoin, to replace Bitcoin spot? I am optimistic about the cryptocurrency circle, should I buy shares of Coinbase?
I think this way because the current biggest issue is that Bitcoin, in the past, could never be compared with these subjects.
Some friends might say, I won't buy Bitcoin, I'll buy altcoins. Of course you can, but the risks will be greater. However, based on my aforementioned points, now, in 2024, buying altcoins has a risk-return ratio that is far lower than in the past. This is indeed an inevitable path for the continuous development of every industry. After all, when everyone dares to play and recognizes it, the dividends of this industry will be gone.
Everyone should cherish the existing dividends. Based on my own predictions, there might still be 1.25 cycles of dividends left, which would be a blessing, that is, for about 5 years.
However, from the perspective of the definition of this industry (speculative subjects, new asset issuance methods), those who are willing to work hard, fight, and embrace risks, I still believe that the opportunities in the cryptocurrency circle, no matter how many years from now, will always be greater than those in the traditional market.
Continuously pay attention$BTC $XRP $ETH
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