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Gu Yanxi: The market's understanding of Bitcoin is biased.



Now the market has more understanding of the value of Bitcoin. This is directly reflected in the market capitalization of Bitcoin. It took only 12 years for Bitcoin to reach a market value of $1 trillion, and that was without a penny of promotional funds. 12 years is far less than the time it took Microsoft, Apple, Google and Amazon to reach a trillion dollar market. But even though the market's understanding of Bitcoin is much deeper than before, there are still many misunderstandings. Such misunderstandings also include supporters of Bitcoin, and of course those who buy and hold Bitcoin with their own funds. Such misinterpretation directly determines the proportion of Bitcoin in an investor's investment portfolio.

One of the current misconceptions about Bitcoin is to compare Bitcoin to digital gold. Think of Bitcoin as a store of value. This understanding may help people understand the value of Bitcoin in the early days of Bitcoin's development. But today, if you still think of Bitcoin as a value storage tool or a new asset type, you can't really understand the value of Bitcoin. As a store of value, Bitcoin is superior to gold in every fundamental attribute. Bitcoin is several times superior to gold in terms of limited total amount, fair access, permanent preservation, fine cutting, ease of circulation and transaction, and security. More critically, Bitcoin is open to all individuals in a fair manner. Now any individual user can obtain Bitcoin through mining. And Bitcoin is traded globally. It is market priced in an uninterrupted manner by users worldwide. Therefore, users anywhere can buy and sell bitcoins at a fair price around the world. Therefore, Bitcoin is far superior to gold in terms of acceptance by users around the world. And most importantly, Bitcoin is a digital product of the 21st century, not a naturally occurring mineral that has been used for over 5,000 years. Therefore, it is a value storage tool that conforms to the development of the times.

Gu Yanxi: The demand for BTC leads to an increase in USDT, and most of the Diem USD will flow into BTC: On February 13, Gu Yanxi, the founder of the American Liyan Consulting Company, tweeted that the demand for BTC led to an increase in USDT, not the other way around. From 2021 onwards, compliant USD stablecoins will grow rapidly. If anything happens to USDT, this will continue to sustain the growth of BTC, plus, a large part of Diem USD will flow into BTC. [2021/2/13 19:40:37]

In terms of settlement, Bitcoin runs on its own network, that is, it runs automatically on a network supported by blockchain technology. And this network is gradually being adopted as a value transfer tool and a payment tool. In other words, the Bitcoin network is a payment network on a global scale. And this network is autonomous, not controlled by companies like SWIFT, Visa or Mastercard. Any user in the world, as long as he can join the Bitcoin network, he can use this network to conduct direct transactions based on Bitcoin with any user in the world. Therefore, the understanding of Bitcoin cannot just be understood as an asset type. And it should be understood as a network as well. And the network is growing. As the number of network nodes and users grows, the value of the network (that is, the value of Bitcoin) will grow quadratically.

Gu Yanxi: The entry of institutional funds pushes up the market value of Bitcoin, and its value consensus is completely different from the value consensus of the Internet era: On December 22, Gu Yanxi, a researcher of blockchain and encrypted digital assets, published a column saying that Bitcoin is now The market capitalization of China has surpassed the market capitalization of JP Morgan Chase, the largest commercial bank in the United States, and has also surpassed the market capitalization of Visa, a network that provides global credit card clearing services. This shows that the market has formed a consensus on the value of Bitcoin on a global scale. If only ordinary retail investors around the world form a consensus on the value of Bitcoin, it will be difficult to push the market value of Bitcoin to the current height. The reason why Bitcoin has reached its current market value is because institutional funds have begun to enter Bitcoin. He said in the article that a common view still exists in the market is that the value of Bitcoin is the result of market speculation, and the value caused by such speculation will not last. This view often compares Bitcoin's value to similar bubbles in history, such as the most recent dot-com bubble. However, the current value consensus of Bitcoin is fundamentally different from the value consensus of the Internet era. The value of Bitcoin is not at all dependent on underlying ownership or expected returns. The characteristic of Bitcoin value is that it is its value itself. The size of this value is completely judged by the market, and it is completely people's subjective judgment. Gu Yanxi finally pointed out that the market is not very optimistic about the current currency circulation mechanism, so it is possible to use Bitcoin as a value storage and transfer tool, which leads to the continuous rise of Bitcoin prices. [2020/12/22 16:03:48]

Another misconception about Bitcoin is that it has no intrinsic value. It does not have future earnings like stocks or bonds. But Bitcoin was designed as a currency, so financial products like stocks or bonds cannot be used to measure Bitcoin. Instead, Bitcoin should be viewed by the standards of money. If we analyze the three basic properties of money, Bitcoin is now accepted as a store of value. It has now also begun to be used in transactions. Of course, such a transaction is not a daily transaction such as paying for coffee, but appears in international trade, such as the purchase of Tesla's electric vehicles, and the purchase of high-value products such as season tickets for the VIP room of the American professional baseball team. As a currency with a history of only 12 years, it has now been applied to payment in some local areas around the world. The development of such applications is already very fast. Now some third-party financial terminals in the United States, such as Square and Strike, can already realize small transfers of Bitcoin between users. So Bitcoin as a payment tool is being applied. In terms of being a unit of account, Bitcoin is still too early to achieve this goal. But I think that the adoption of bitcoin as a unit of account will take place much sooner than generally expected. Given the speed at which additional issuances like the U.S. dollar are being issued, Bitcoin will develop faster than normal as a unit of account.

Gu Yanxi: The U.S. Office of the Comptroller of the Currency is accelerating the encryption and digitization of the U.S. banking industry: On November 5, Gu Yanxi, a researcher of blockchain and encrypted digital assets, published a column saying that the U.S. Office of the Comptroller of the Currency is accelerating the advancement of the U.S. banking industry. encrypted digitization. He said that starting in 2020, the U.S. banking industry began to experience a comprehensive acceleration in the provision of financial services related to encrypted digital currencies. Moreover, this accelerated development is the result of the top-down promotion of the US banking industry. Specifically, the result of Brian Brooks, the new head of the U.S. Office of the Comptroller of the Currency. Brian Brooks believes that the current financial industry is undergoing fundamental changes, just as the Internet has changed the world. [2020/11/5 11:41:10]

A common criticism of Bitcoin today is that it is too volatile to be suitable as a payment tool. This point of view is applicable to the early days of Bitcoin. But when Bitcoin develops to a certain level, the volatility of Bitcoin is not determined by its own characteristics. Rather, it is determined by the statute with which it is transacted. The total amount of bitcoins is fixed, so the value of each bitcoin should be constant, and what is uncertain is the various legal currencies that are traded with it. Additionally, Bitcoin volatility has actually started to decline. Since the first quarter of this year, Bitcoin volatility has shown a downward trend. Bitcoin volatility is expected to drop further as liquidity increases, especially as institutional buying has now begun and with the imminent launch of Bitcoin-based ETFs in the US market.

Voice | Gu Yanxi: The next Libra is likely to appear in Southeast Asia: Gu Yanxi, the founder and dean of the CBX Research Institute, commented in the WeChat group that the next Libra is likely to appear in Southeast Asia. He predicted that the next Libra is likely to be registered in Singapore and will also adopt the form of a member alliance. Members are compliance organizations in Southeast Asia, and the membership threshold is much lower than 10 million US dollars; it has more equal members that are more in line with the characteristics of the blockchain, and will provide a POS-based alliance chain that supports smart contracts. The alliance chain will support nodes to issue stable coins based on a single legal currency. There will be multiple stablecoins circulating on the chain. At the same time, the alliance provides stable currency exchange services similar to foreign exchange transactions. [2019/10/27]

For a bitcoin investor, how much he knows about the value of bitcoin directly determines his investment and holding strategy for bitcoin. In order to ensure that your investment portfolio obtains the maximum return after long-term risk adjustment, you need to have a correct understanding of the nature of Bitcoin.


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Gu Yanxi: The market's understanding of Bitcoin is biased.

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