2020 may be the year of bitcoin counterattack

Forex Skyeye APP News: Recently, Bitcoin seems to be in a dilemma. Although the price of Bitcoin seems to be extremely volatile, the cryptocurrency has been in a consolidation period in the past two weeks, reaching 7,470 briefly. After the high of the dollar, it hovered between the high zone of $ 6,000 and the low zone of $ 7,000. Next, where will Bitcoin go?

For a long time, people have been skeptical about the basic value of cryptocurrencies. They listed Bitcoin’s “slow” transaction speed, Ethereum hacking and other “shortcomings” in the industry, claiming that this asset class has no future. However, in today’s turbulent world, the macroeconomic landscape is developing, especially cryptocurrencies, especially Bitcoin.

A report published by Bloomberg said that Bitcoin is saving power for a large-scale bull market. The report highlights that 2020 will be the year when Bitcoin becomes Crypto gold. “This year is the key test for Bitcoin’s transition to a quasi-currency like gold, and we expect it to pass this test.”

There is an increase in people interested in blockchain and cryptocurrencies

According to a survey conducted by Paxful, the global P2P bitcoin trading market, Americans who understand cryptocurrencies are showing increasing interest in blockchain technology and cryptocurrencies. This group of people increasingly see Crypto assets as a replacement for the “defective” traditional financial system.

A research report released on April 23 stated that cryptocurrencies are maturing as an asset. Nearly 50% of respondents believe that emergencies within the traditional financial system will serve as an opportunity to help people turn their attention to Bitcoin as an alternative.

The survey revealed that the most common uses of Bitcoin include real-life payments (69.2%) and combating inflation and corruption (50.4%).

Artur Schaback, chief operating officer and co-founder of Paxful, said in an interview: “It is worth noting that many people believe that mainstream adoption will be achieved in the next 6 to 10 years. On the contrary, some respondents believe that the same The cryptocurrency bubble will burst in time. I have hope for the first situation, so I believe that as an industry, we should strive to create more products and apply more products to real-life use cases. Help accelerate mainstream adoption. “

In the context of the global covid-19 pandemic, Paxful believes that both cryptocurrencies and traditional financial systems are being tested, which explains to a certain extent why btc prices are rising as BTC becomes a safe-haven asset.

Schaback emphasized that compared with before, people’s awareness of Bitcoin is undoubtedly higher now. “I remember when we first started, nobody knew bitcoin, and even remembered the word ‘bitcoin’. However, judging from the survey results this year and last year, more people have heard of bitcoin. More people associate it with different concepts such as currency and technology. We still have a long way to go, but I am eager to see more products that will help to go mainstream. “

Regarding the barriers to adoption, the survey also emphasized that 53.8% of respondents believe that the lack of relevant knowledge hinders the popularity of cryptocurrencies.

According to the report, the respondents believe that the main factors contributing to the adoption rate are mobile mining, the recovery of altcoins, institutional investments, and the use of blockchain technology by companies.

Paxful’s COO commented on future challenges: “The biggest challenge is still knowledge about the cryptocurrency itself. We know that more people have heard of it, but I think it is the wrong reason, such as gambling and many Because of these, mainstream audiences still have a sense of fear. As an industry, this is our biggest challenge. “

Bitcoin futures continue to recover

After experiencing a decline in trading volume in the past few weeks, bitcoin futures trading volume has begun to rebound. According to the latest data from CME, its products reached a new high in terms of active accounts last month, with a compound annual growth rate of 161%.

According to reports, the Securities and Exchange Commission (SEC) of the US regulatory agency confirmed that the Medallion fund (medallion fund) under Renaissance Technologies can now enter the booming bitcoin futures market. This fund is known for its outstanding investment return performance so far this year.

According to information, Renaissance Technology will provide CME Group’s cash-settled Bitcoin futures contracts, CME is one of the two earliest Bitcoin futures providers.

The $ 10 billion hedge fund owned by Renaissance has recently made a name for itself in the media. Although the covid-19 virus has plunged the global market into continuous turmoil, this fund has achieved 24% growth so far this year. According to CNBC, the management scale of the Medal Fund is around US $ 10 billion, equivalent to approximately RMB70 billion. Based on the management scale of tens of billions of dollars, this year’s income is about 3.9 billion US dollars, which is equivalent to nearly 30 billion yuan. After deducting management fees and performance sharing, the fund earns about 2.4 billion US dollars, which is equivalent to nearly 17 billion yuan.

According to the Wall Street Journal, as of April 14, the cumulative return of the Medal Fund this year reached 39%. Even in the “Great Falls” market in March, which I have never seen in Buffett’s lifetime, the Medal Fund still achieved a 9.9% return. In the same month, the S & P 500 fell 12.51% and the Dow fell 13.74%, both of which were the largest monthly declines since October 2008.

There is no doubt that this medal fund, which has never suffered losses since its inception and has been able to obtain anti-sky gains during the economic crisis, represents the recognition of traditional capital for the cryptocurrency market, and it will inevitably bring huge profits to the CME Bitcoin futures market. fluidity.

Unlimited easing policy may stimulate Bitcoin counterattack

Despite the strong rebound in asset prices, including cryptocurrencies, the global economic outlook remains worrying. Over the past five weeks, in the United States alone, 26 million workers have applied for unemployment. At the company level, the research company expects the company to lose trillions of dollars in revenue.

Therefore, it is not surprising that the efforts of central banks and governments around the world to save people, companies and entire companies.

In order to alleviate the threat of economic recession due to the impact of the epidemic, the Fed made unprecedented “big moves”. On the evening of March 15, the Fed lowered interest rates to zero and launched a massive quantitative easing program of $ 700 billion. On March 17, the Fed launched the Commercial Paper Financing Facility (CPFF) and Primary Dealer Credit Mechanism (PDCF) to provide liquidity to commercial paper issuers. On March 23, the Federal Reserve issued an unlimited quantitative easing (QE) policy and began to “buy” almost all credit products except stocks in the market, providing sufficient liquidity support for the market.

Many people believe that the Fed’s repeated actions just highlight the seriousness of the US situation.

The Bank of Japan Bank of Japan (BOJ) also confirmed this trend. According to Nikkei Asian Review citing people familiar with the matter, the Bank of Japan is seeking unlimited purchases of Japanese government bonds in an attempt to stimulate the economy. It also hopes to expand its quantitative easing program to double the purchase of corporate bonds and commercial paper.

Although the United States has launched a limited bond purchase plan, Max Bronstein, a member of the cryptocurrency exchange Coinbase’s institutional investment team, asserted that “the current system has completely collapsed.”

More and more people believe that, compared with the central bank’s fiat currency, decentralized and relatively scarce crypto assets will benefit from this trend toward the unknown currency and fiscal field.

Former Goldman Sachs executive, hedge fund manager Raoul Pal explained in the April edition of the Global Macro Investor newsletter that he thinks we are likely to see “our currency system malfunctioning” or “the current financial structure collapse “.

Bitcoin will greatly benefit from the transition from a legal system to a Crypto ecosystem. Regarding bitcoin, Pal wrote: “This is a complete, trusted, proven, secure, financial and accounting Crypto value system. Our entire trading system, the currency itself and the future of its operating platform are more than that. “

He added that bitcoin could reach $ 100,000 in the next two years, and even throw a cap of $ 1 million when the macro outlook changes dramatically.

After the “infinite quantitative easing” policy, will bitcoin still be a “safe haven asset” under the financial crisis? In this regard, Galaxy Digital CEO Mike Novogratz also predicts that Bitcoin may follow the gold price breakthrough, mainly because these two assets are scarce in nature.

Xu Yingkai, the founding partner of BlockVC, said on Weibo that the high probability of USD 3800 in Bitcoin is the bottom of the market in this round of decline. After the halving of Bitcoin (1-2 months later), the market began to fully recover. The decrease in earnings will concentrate a wave of miners, but the daily new market selling pressure also doubles year-on-year, and the “death spiral” is expected to gradually weaken.

However, some insiders pointed out that “safe haven assets” is an old concept, but considering that Bitcoin has a vast market and liquidity is much stronger than other traditional varieties before, the future demand will definitely continue to rise. Therefore, after the plunge, bitcoin will pick up faster than traditional American assets. From this point of view, bitcoin can still have a better prospect, but from the current market, it can not be said that hedging.

In fact, after the short-term collapse of Bitcoin, in the medium and long term, this price is very attractive, and may be the starting point of the next bull market.

Bitcoin is charging for the future bull market

A report published by Bloomberg said that Bitcoin is accumulating power for the bull market. Even the headline of the report expressed a clear bullish view-“a big leap forward in Bitcoin’s maturity”. Bloomberg believes that this year Bitcoin will complete the key test of the transition to a quasi-currency like gold.

The report mentioned a series of reasons why the Bitcoin market is maturing. The report also affirmed that “if history can be used as a guide, Bitcoin is getting relative fuel as the stock market resets.”

In addition, Bloomberg said that Bitcoin and Gold, the two safe-haven assets in people’s eyes, are expected to gain the most from the market turmoil caused by the recent covid-19 pandemic.

But according to a well-known cryptocurrency analyst, if Bitcoin reaches a certain price point, it may trigger a market binge, in other words, a sharp increase in the price of the currency.

On Saturday, 200,000 followers on Twitter and a trader named CryptoYoda released their latest series of technical analysis articles, in which he explained that the Bitcoin market structure tends to go down due to the formation and head of a wedge-shaped rise Shoulder pattern — a bearish signal as defined by two textbooks — but Bitcoin’s breakthrough of $ 7475 will overturn this situation, “forcing shorts to clear positions and encouraging longs to buy these positions”:

“A breakout at such a high level will result in a large short covering and the volume of buy orders will drive a strong rebound, especially since buyers have already eaten through the previous low resistance levels.”

What he wants to explain is that if Bitcoin successfully breaks through, it can prove that the current sideways consolidation is not a hint of peaking, but a process of consolidating and continuing to rise, which may reach $ 8,000 or higher.

Avi Felman, a trader and analyst at the crypto asset fund BlockTower, observed last Friday that two technical signals clearly indicated that Bitcoin price will soon receive a correction:

Tom Demark Sequential is a time-based indicator, and a continuous counting sequence of sales appears in the 3-day K-line chart. The same situation occurred twice before in mid-March and December 2019 when the currency price bottomed out, but reached the top of $ 10,500 earlier this year.

Ethereum seems to be unable to break through the 50-day and 200-day moving averages of the 3-day K-line chart,

In addition, DonAlt said that although the recent daily line did not show a “strong downtrend”, it was “very close to the expansion of Bitcoin at the top of $ 10,000”. Current structural similarities.

A Bloomberg report “Bitcoin Maturity Leaps” reported that Bitcoin is preparing for a large-scale bull market. In the report, the author elaborated on the correlation between Bitcoin and the S & P 500 index, gold, zero and negative interest rates. According to the report, stock market turbulence has accelerated Bitcoin’s transition to “Crypto gold.”

In 2020, it will be possible to determine whether Bitcoin can change from risky speculative assets to “Crypto gold”. From a volatility point of view, bitcoin volatility seems to have declined, while stock market volatility has begun to rise. Such market reactions will also allow more people to transfer funds to crypto assets.

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