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Grayscale is the biggest bull.Why did funds choose to speculate on altcoins this week?



Recently, Grayscale released a report, which said that the current Bitcoin market structure is similar to that before the historic bull market began in early 2016.

The specific arguments are mainly supported by the loose monetary policy after the US abandoned the gold standard, resulting in a cycle of asset bubbles driven by debt, followed by aggressive quantitative easing policies.

The U.S. economy has become increasingly reliant on quantitative easing (money printing) to stay afloat, and history shows that this addiction is hard to kick. The S&P fell 20 percent in three months as the Fed launched a liquidity program in 2018 to reverse monetary expansion.

Investors wary of inflation are looking for ways to protect against an expanding money supply amid unprecedented monetary and fiscal stimulus, bolstering bitcoin as a store of value.

At a time when the amount of bitcoin held on exchanges is at an all-time low, interest in crypto is growing, with more long-term holdings than short-term speculation.

Negative premiums of trust products such as Grayscale Bitcoin and Ethereum hit record highs: On May 13, according to Coinglass data, negative premiums of trust products such as Grayscale Bitcoin and Ethereum hit record highs. Among them, Grayscale Bitcoin Trust has a negative premium of 30.65%, Ethereum Trust has a negative premium of 33.71%, and ETC Trust has a negative premium of 54.55%. [2022/5/13 3:13:12]

And daily active-ethexc addresses are at their highest level since the all-time high in 2017.

This is basically the same as the logic expressed in our previous article, that is, due to the epidemic, government and banking institutions all over the world are releasing water, the economic level needs a long recovery period, and the monetary policy will be in a loose period for a long time. Conducive to the future period of time, inflationary financial products such as gold and Bitcoin will be in a benign development environment.

The report also noted that institutional demand for Bitcoin is increasing.

Many people believe that Grayscale’s report expresses such an idea, saying that in order to allow investors to take over the deal, this possibility cannot be ruled out, but judging from Grayscale’s own actions, they are also acting according to the situation described in the report.

Grayscale has increased its holdings of MANA and other 6 currency trust funds: According to the data of Okey Cloud Chain masters, as of December 13, Eastern Time, the total value of the 14 single-asset trust funds issued by Grayscale Investment is 43.181 billion US dollars; during the same period, Grayscale Trust increased its holdings by 25,600 MANA, 2,820 LPT, 104,700 BAT, 6,230 LINK, 1,943 FIL, and 553 SOL, and the rest of the trust did not increase its holdings; the current GBTC premium rate is -20.57% , the lowest since May 16. [2021/12/14 7:37:41]

According to Grayscale’s mid-year report, Grayscale made the largest move in the cryptocurrency market in the second quarter, with a total investment of $1.4 billion, an average weekly investment of $54.2 million, and an average weekly investment of $43.8 million in GBTC. ETHE invests an average of US$9.4 million per week, and GBTC invests an average of US$10.4 million per week, of which 85% comes from institutional investors mainly hedge funds.

Grayscale’s Ethereum Trust Surpassed GBTC’s Daily Trading Volume in September for the First Time in History: October 3 News According to a report from CryptoCompare, Grayscale’s Ethereum Trust (ETHE) recorded daily trading volume in September for the first time in history surpassed GBTC. The research also highlighted that total assets under management (AUM) for bitcoin-based products fell to new lows in September, while ethereum’s market share peaked as investors diversified their crypto portfolios. “AUM of Bitcoin-based products fell by 7.8% in September to $35.1 billion (currently 67.9% of total AUM – the lowest share since April this year, at 78.3%). On the other hand, Ethereum-based products achieved the highest market share with 25.9% AUM, and then fell 3.0% to $13.5 billion. [2021/10/3 17:21:49]

The amount of Bitcoin funds flowing into Grayscale throughout the second quarter accounted for almost 70% of Bitcoin mining during the same period, and after Bitcoin's third halving in May 2020, this ratio increased to 118%.

Grayscale founder: Many cryptocurrency traders have become long-term investors: On May 24, Grayscale founder Barry Silbert tweeted: "Many cryptocurrency traders have become long-term investors, which is healthy. "[2021/5/24 22:36:11]

This shows that in the second quarter, Grayscale purchased Bitcoin spot aggressively, and after the Bitcoin halving , and even bought all the bitcoins that could be bought on the market, so not to mention whether they have the intention to find someone to take over, at least everyone knows that Huidu has been buying. What's more, in fact, it is not Grayscale who is buying it, but other institutions are buying it through Grayscale, so it is not just the idea of an investment institution.

Of course, many people think that if the gray scale report is useful, then everyone can make money after reading the report. In fact, this kind of statement makes sense, because there are indeed many people who buy bitcoin spot and hoard coins recently, including other institutions. and individual investors.

Secondly, most of the people who cannot make money are contract investors. Those who have traded know that spot and contract are two things, which is equivalent to the difference between investment and speculation.

What is investment, there are those who buy houses for investment, and those who buy shares for investment. Most of the investment refers to participating in assets that do not flow within a short period of time, and hoarding coins is also a kind. But the essence of contract trading is speculation. Many people use investment data as a reference for their own speculation. It is Guan Gong and Qin Qiong. They are not things in the same time and space, and the reference backgrounds are very different. With the idea of real investment, in the bitcoin market, profit is a high probability event.

The current bitcoin trend is basically the same as what we said in the early market, and it is in the rebound market that has fallen to a key position. At present, the rebound is relatively limited and needs to be verified in several trading days, but what is certain is that $11,500 and $11,500 The 30-day moving average at the daily line level is an important short-term support.

Of course, we should also pay attention to the weekly level risks we have been reminding, in fact, if it is extended to the weekly level , There are two possibilities, one is what we said yesterday, next week it may return to the 10-day moving average. Second, returning to the vicinity of the 10-day moving average does not necessarily depend on how much the price has fallen. It may be due to local shocks, waiting for the moving average to rise, or it may be that the price and the moving average are in relative motion at the same time, but the magnitude of this callback is uncertain, so it is used as a reminder Sexual risks exist.

In the current market, there is a saying that the more you fall, the more you buy. We cannot be so sure about this statement, which means that we must be very optimistic about the future price of Bitcoin, and the future of Bitcoin is very subjective. I am optimistic about Bitcoin. Others may think that Bitcoin is about to return to zero. If you are optimistic about Bitcoin, you can seriously consider this sentence.

In addition, for contract investors, this sentence is not important. Even if you understand this sentence, it will not stop the one-hundred-fold billing model. The short-term trend of Bitcoin is the most important, and it has nothing to do with the future of Bitcoin.

In addition, I will not introduce a single DeFi project today, but will make a summary of the recent market.

There were no bright projects this week. This is normal. After all, it was so hot last week. It is reasonable to turn off the fire a little bit. Investors also have aesthetic fatigue. This is the same as the market, and the sudden rise is particularly strong. , There are also times when a callback is required, but can you say that this callback means that the market is over? No, there is still a possibility of shocks brewing for the next market, and this probability is still relatively high.

Last week, several popular currencies fell into a correction this week, such as LiNK, Comp and other DeFi currencies. As we said some time ago, when DeFi is temporarily shut down, funds will flow back to Bitcoin and mainstream currencies. The breakout on Monday last week was announced.

But unexpectedly, the macro market began to change on Tuesday. Bitcoin was dragged down by gold and began to be under pressure. The funds can only flow to altcoins, which is why domestic public chains have surged in recent days.

However, the old problems that have always existed in the domestic public chain have not been improved, and they are still used to taking advantage of others. On the contrary, their own development is limited. There are still only a few who have their own ideas, such as OMG and Quantum Chain. Other public chains only use these two heats. , and this wave of market even for these two projects is only a little more hyped, so sustainability is still a problem after all.

In short, as long as the funds are still in the currency market, they will return to the mainstream currency of Bitcoin and DeFi after the heat in this market subsides. You can wait and see.


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