After Blackrock, the largest asset management group in the United States, formally applied to the U.S. Securities and Exchange Commission for a Bitcoin ETF on June 15, 2023, the price of BTC has been close to 31,000 U.S. dollars. This scene reminds people of 2019, also at the end of June, when the price of BTC returned to 10,000 U.S. dollars. A three-fold increase in four years is not a bad return. It should instantly kill 99.9% of fund managers in the same period.
On June 18, 2022, the price of BTC once fell to $18,250. The famous economist and Nobel Prize winner Krugman jumped out on Twitter on time and said with gloating, "Fellow countrymen, this is so touching" (he also jumped out once when Bitcoin fell to $3,000 at the end of 2018). One year after Mr. K's speech, Bitcoin rose by 69%. It is really touching.
But many people who entered the industry early on no longer have much BTC. The reason is very simple. Most people want higher short-term returns and adopt various subjective and fancy strategies, but in essence they are gambling with leverage and leave no room for themselves. Sooner or later, they will be forced to sell their positions in the inevitable but unpredictable market fluctuations.
Institutional funds were almost liquidated in the big drop in March 2020, but they continued to gamble and made more money later. They insisted on this aggressive strategy, and thus were completely wiped out without any suspense in the big drop in June 2022.
Players who lack redundancy may quickly encounter a chain reaction once they are hit by an unforeseen incident. The collapse of a subsystem may lead to a chain collapse of higher-level systems, escalating into a huge disaster in a short period of time, or even leading to the complete destruction of the entire system. However, after being exterminated, it will be difficult for these people to truly pass on their experiences and lessons to future generations, which will inevitably lead to the next wave of ignorant newcomers repeating their experiences.
Many people cannot bear the price fluctuations of BTC, but this fluctuation actually reflects more the changes in the growth and contraction of US dollar credit. The Federal Reserve itself cannot accurately predict the changes in inflation and employment, let alone the adjustment of its own monetary policy. It is impossible to "have both... and" everything in the world. It is impossible to "have a small price retracement when the market is bad, and a good return when the market rises", and it is impossible to "have the horse run without eating grass". If a customer asks you this, leave him, he will sooner or later fall into the arms of scammers like Madoff; if the boss asks you this, he just wants to take the credit for the achievements and use you as a scapegoat when problems arise.
People often mistake things that have a temporary premium due to short-term constraints as scarce assets. After the outbreak of the Russo-Ukrainian war, the spot price of crude oil was once hyped up to $120 a barrel. If you sit down and think about it calmly, you will know that high oil prices will suppress demand, while increasing mining activities and supply, and crude oil prices will eventually come down. But no matter how many new mining machines you buy to mine, the supply of BTC will not increase, and it will be halved every four years on schedule. This is one of the most essential differences between it and commodities/precious metals.
In March 2023, when Silicon Valley Bank was on the verge of bankruptcy and hundreds of billions of depositors’ deposits were at great risk of being fleeced, the Federal Reserve acted decisively and conjured up tens of billions of dollars of emergency loans to save depositors. BTC didn’t care at all and was still quietly producing a block every ten minutes and adjusting the difficulty coefficient every two weeks. People suddenly realized what is a truly scarce asset and what is a game that can be arbitrarily issued by a few people.
Just hold on to the scarce resources firmly and don't care how others take them. Let them squander the truly scarce resources and exchange and compete for the actually non-scarce resources at a high premium.