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How big is the space for this round of Bitcoin and DeFi market? What do the top "players" think?



Dave Portnoy is an online celebrity trader who is active-ethexc on the Twitter platform and became popular this year for live stock trading. His August 13th video talked about Bitcoin, and this time, he asked half-seriously, half-jokingly, "How can I see Bitcoin, can I mine it with this green hammer?" As a highly active-ethexc trader, It may be difficult to ignore the existence of Bitcoin this year-the price of Bitcoin has risen three times from its lowest point this year, including a 25% increase last month, and this July has also become the best performance of Bitcoin in the past 8 years "best July". On August 14th, the Bitcoin billionaire Winklevoss brothers gladly accepted the invitation of this man, and came to give him a "science popularization", and then Dave Portnoy claimed to have bought $200,000 worth of Bitcoin assets. Perhaps, you can regard this process as a microcosm of the entry of the rich. As the first project that almost everyone understands the blockchain, Bitcoin is the most direct holding target. Since the beginning of this year, many institutions and rich people have also publicly declared that they have purchased a large amount of Bitcoin and used it as an important part of encrypted asset allocation. There are different opinions in the industry about the reasons for the rise in the price of Bitcoin, some are convincing and some are not. But in general, no one can tell the exact factors that lead to the price increase. Binance Research can sum it up in one sentence: One thing is certain, that is, there are more people who want to buy than sell. This can also be corroborated by comprehensive technology, data, financing and market conditions. A more specific point of view comes from Wang Chao, a senior practitioner in the industry and COO of Bitpie, "There is no doubt that more and more institutions are entering the market, and the funds entered by Grayscale alone have exceeded the recent mining output of Bitcoin. Although some arbitrageurs take advantage of Grayscale’s market premium for arbitrage, real institutions still occupy a considerable proportion.” The number of unconfirmed transactions on the Bitcoin network is 3,234: Golden Finance Report, according to data , At present, the number of unconfirmed transactions in the entire Bitcoin network is 3234, the computing power of the entire network is 201.34 EH/s, the 24-hour transaction rate is 3.08 transactions/s, and the current difficulty of the entire network is 28.17 T. 28.42 T, 1 day and 14 hours left before adjustment. [2022/8/17 12:29:45] He repeated again: "There is no doubt that the entry of institutions is the support of the market (one of them)." In addition, OKex CEO Jay Hao also added that due to the extreme The impact of loose unconventional monetary policy has injected a large amount of liquidity into the market, which has also imperceptibly pushed up the price of Bitcoin. According to public data, the number of visits to the KuCoin trading platform in July increased by 60% year-on-year, and the trading volume of its spot platform and contract platform increased by 80% and 160% respectively compared with June. The entry of funds and traffic is the internal driving force for market development. Driven by demand, under the buying and buying strategies of institutions or rich people, not only the price of Bitcoin has risen, but the data shows that the holdings of Bitcoin seem to be becoming more and more concentrated. According to the above statistics, 0.046% of users now hold more than 60% of the number of bitcoins. It seems that Bitcoin seems to be suspected of becoming a game for a few people. However, when this doubt is thrown to trading platforms with information advantages, they give different perspectives. When asked about the doubts that "the concentration of Bitcoin holdings is too high, which may make the market vulnerable to price manipulation", Gao Gao, head of operations at the Huobi DeFi Lab, said frankly that this is just a normal market phenomenon and does not need to be manipulated. Excessive interpretation, "The current position of Bitcoin in the encryption market matches the strength of Bitcoin. Bitcoin is still a well-deserved leader in cryptocurrencies and is widely recognized and accepted by investors. It is not so much that the market value of Bitcoin is high. , It is better to say that the market value of other cryptocurrencies is low. When high-quality cryptocurrencies appear, the market will naturally give them the high prices they deserve.” President of El Salvador: Investors do not have to worry about Bitcoin price trends, patience is the key: news on June 19 , El Salvador President Nayib Bukele tweeted, I see some people are worried or anxious about the price trend of Bitcoin. My advice is: stop looking at the charts and enjoy life. If you are already invested in BTC, your investment is safe and its value will increase substantially after the bear market. Patience is key. [2022/6/19 4:38:43] However, there is also an objective phenomenon: a large number of Bitcoin assets exist in the hands of trading platforms and custodians, which also means that perhaps millions of Bitcoin holders have stored assets for several Among the ten trading platform addresses. Putin, the CSO of HashKey Hub, also agreed with this view, and added, "With the increasing acceptance of digital currency and the participation of institutions, BTC has accelerated to concentrate on trading platforms and institutional addresses. From the perspective of traditional finance, funds The collection and custody model has begun to appear. This is in line with the development trend. It also shows that Bitcoin is not suitable for payment in the current form. It is more like a gold-like product, which is kept by a professional organization. Focusing on transaction behavior, the transaction attribute of BTC is greater than the actual payment attribute.” Compared with the continuous attempts and expansion in payment and other fields, Bitcoin is becoming more and more unstoppable in the development of digital gold. However, when the blockchain is an emerging The market is starting to exert its strength, and Bitcoin will no longer be the only topic every year. In the past few years, cryptocurrencies have had new stories every year. If you have followed the cryptocurrency market long enough, perhaps before this round of rising prices, you may also feel that the market seems to be fluctuating on a yearly basis: for example, in 17 years 1CO, 18-year transaction mining, 19-year 1EO model. The key words this year are obviously Bitcoin halving and DeFi. After more than two years of brewing, the DeFi protocol suddenly broke out this year. DeFi successfully drove FOMO sentiment and attracted attention and new funds to the market. One of the important supports of the round market. Regarding the rise of DeFi, the climax of Huobi believes that this is not an accidental phenomenon: SBF: Confused about why the SEC allows Bitcoin futures ETFs but not spot Bitcoin ETFs: Golden Finance reported that at the encryption hearing in the US Congress today, Rep. Tom Emmer posed a series of questions to the SBF to determine what protections FTX offers its users. Later, SBF said that he was "confused" that the US SEC allowed the launch of Bitcoin futures ETFs, but did not allow the launch of spot ETFs. (CoinDesk) [2021/12/9 12:59:36] “For example, DeFi, after 2018 and 2019, some basic protocols have gradually matured, covering stable currency, lending, trading, synthetic assets and other fields, especially after experiencing In the extreme test of 3.12, DeFi began to show its intrinsic value. In June, the mining of Compound and Balancer allowed the locked-up assets to grow rapidly from 500 million US dollars to 7 billion US dollars. DeFi gave the blockchain wings, and the scale is still It keeps growing, so the full blossoming of blockchain in DeFi supports the current market.” The market’s optimism about the development of DeFi cannot conceal the high operating threshold in this field and the existing problems in security risks. As shown in the figure above, this year, on the one hand, the amount of DeFi financial lock-ups continued to increase rapidly, surging from US$130 million to US$10 billion in August. On the other hand, DeFi has become a playground and cash machine for hackers. Attacks on DeFi smart contract vulnerabilities continue. Unimaginable security incidents in the traditional financial industry are common in DeFi. In the face of DeFi's explosive market value, the voice of security issues is often drowned out. The spot price difference of Bitcoin has continued to fluctuate in recent days, breaking through 10% today, and the sentiment index is a "bull market": Jinse Finance reported that, according to data from peers, on December 14, the annualized spot price difference of Bitcoin was 10.73%, an increase from the previous day. Rising 2.52%, the market sentiment index is "bull market". Index reference: >20 % extremely bullish; 10%~20% bullish; 5%~10% optimistic; 2%~5% cautiously optimistic; 0~2% cautious; -5%~0 cautiously pessimistic; -10%~- 5% pessimistic; -20%~-10% bearish; <-20%: extreme bearish. [2020/12/14 15:07:08] If only from the perspective of temporary lock-up assets, DeFi has been said to be relatively successful. But when it comes to real landing and large-scale application, in the view of Putin of Hashkey Hub, there are still "lack of stable core value, which is out of touch with reality; gas fee is too high, and the underlying foundation is limited; and code security issues and security accidents Therefore, DeFi is still a long way from a safe ecology with a complete product development path. Jay from OKex commented that although there were some security incidents (DeFi), the protocol quickly learned from the incidents and became more robust after repairs. DeFi has just started, especially the composability of the protocol, which can easily cause a chain reaction, but it will always fall when it grows up, and it will run faster after getting up. The recent outbreak proves this. DeFi has begun to develop rapidly, and soon exceeded 10 billion US dollars, and has already met the basic conditions for large-scale development in breadth and depth. The breadth of the basic DeFi protocol is sufficient for various combinations, and the depth of assets in various protocols has met the requirements of use, so the conditions for large-scale development have been met, and the rest is to popularize education. However, the network concurrency of Ethereum is a bottleneck, and the small asset business may not be satisfied. This kind of "objective and tolerant" view is not the only one. The climax of Huobi also said: DeFi is still in the early stages of development, and innovation and trial and error are inevitable. In addition to having a tolerant attitude, popularizing DeFi science, lowering the threshold for participation, and helping users safely use DeFi business have also become one of the key projects of various trading institutions and wallets. The U.S. Securities and Exchange Commission issued a letter questioning Bitcoin fund products: According to Reuters, the U.S. Securities and Exchange Commission (SEC) stated on Thursday that the Bitcoin fund industry needs to prove itself before further passing more virtual currency-related products. In a letter to two major fund-trading groups, Dalia Blass, head of the SEC’s Division of Investment Management, raised at least 31 questions about the security, storage and pricing of bitcoin-related mutual funds and ETFs. In addition, the director also questioned whether investors understand that the bitcoin market may be manipulated. She said: "Before the sponsor (SEC) provides these funds to investors, it is necessary to carefully examine the issue of investor asset protection." [2018/1/19] In view of the difficulty for users to obtain information on DeFi projects and the high threshold for participating in DeFi, Ku KuCoin has recently launched a DeFi zone, which gathers information, market trends, and event details of all DeFi projects on KuCoin, making it easier for users to participate in DeFi project investment with a low threshold. In addition, KuCoin's Pool-X platform is also developing new functions To simplify the path for users to participate in DeFi, so that users can directly participate in DeFi on its Pool-X platform. In response to the uneven risk level of DeFi contracts, Bitpie Wang Chao said that its recently launched security center can help users monitor contract authorization risks and help wallet users use DeFi products more safely. Including Huobi Wallet, through protocol transformation, the steps of DeFi participation have been reduced from 11 steps to 3 steps. It is hoped that after greatly reducing the participation threshold, ordinary users will be brought into the DeFi world and enjoy the benefits brought by DeFi. However, IRISnet adopts a different idea: to support DeFi by applying a proprietary chain + cross-chain. DeFi applications that have undergone security audits (such as the launched Coinswap, etc.) can run on the IRIS Hub or form a separate chain; these applications can interact through cross-chain protocols. Putin of HashKey Hub said: "We prefer to say that the current DeFi is just SeMi-Fi (semi-automated finance), and even the ultimate form of DeFi is this SeMi-Fi form, which is realized through contract automation + process governance. Apply automation as much as possible, and reduce human factors as much as possible, such as DeFi for automated contracts + DAO for distributed process management for risk control." The amount of DeFi lockups continues to increase. As a member of the DeFi camp, DEX (decentralized The business data of the trading platform) has also attracted the attention of people in the industry. Due to the high operating threshold, although DEX is one of the earliest developed applications, its transaction ratio has never exceeded 1% of the total transaction volume. In July this year, this proportion jumped to more than 4%, and the transaction volume exceeded 4.3 billion US dollars. The data quickly attracted the attention of the market. There is a new argument for CEX and DEX, which has not been debated for a long time. In this regard, the climax of Huobi admits that the increase in the proportion of DEX transactions is essentially a new model that brings more liquidity. The scale of DEX may continue to increase, and it may form a certain level of influence on the centralized trading platform industry. Conflicts, secondary and tertiary trading platforms may have a greater impact. He further explained: The AMM model is the reason for the explosion of DEX. The traditional DEX is an order book model. Due to the slow transaction speed on the chain, the user's purchase order is always not matched, the slippage is also large, and the depth is not enough. But the AMM model solves the above problems, unlimited liquidity, real-time human-machine transactions, anyone can be a market maker, greatly increasing the depth of transactions. It solves all the disadvantages of the original DEX and allows everyone to benefit from being a market maker. This is the correct posture of DEX, so it has grown rapidly. As for whether DEX can "compel" CEX, Johnny, CEO of KuCoin International, did not shy away from saying, "Currently the proportion of DEX's trading volume is still low, and centralized trading platforms still have an absolute advantage in the short term. But in the long run , With the performance of the underlying public chain and the further improvement of the DeFi and DEX ecology, KuCoin is more optimistic about the development of DEX. For a long period of time in the future, CEX and DEX will coexist for a long time, and DEX may even surpass CEX in the future.” However, OKEx gave different views on the development of DEX. While recognizing the mutual promotion of DEX and DeFi, Jay clearly stated: because AMM DEX has flaws in terms of transaction depth and independent pricing. DEX will not occupy a dominant position in the cryptocurrency market. In the future, DEX and CEX will not replace but complement each other. Users will choose DEX or CEX according to their trading needs.


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