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Golden Hardcore | Pantera Capital: Bitcoin will eventually increase by 100,000 times



Jinse Finance launched the Hardcore column to provide readers with introductions or in-depth interpretations of popular projects. This issue of Golden Hard Core is the latest investor letter sent by Pantera Capital to investors.

Very strange: there are two figures, they both rise by five orders of magnitude, and their relationship is completely constant.

Bitcoin's price increases by $200 for every million additional users. All except for a delay in February 2016.

The rise in the price of Bitcoin has remained surprisingly constant. Why? I'll leave it to a future Avogadro to figure out why. Important point: If this relationship holds true, Bitcoin will reach $200,000 by 2022.

I realize it takes caution to get this forecast, but these relationships have been around for a decade. Over a decade, Bitcoin has seen a compound annual growth rate of 213%. $200,000 next year will be 213% higher than today. This is just normal trend growth.

Jinse Finance Mining Data Broadcast | ETH’s network computing power rose by 1.79% today: Jinse Finance reported that according to the data from Spider Mining Pool:

The computing power of the BTC network is 146.500EH/s, the mining difficulty is 20.82T, the current block height is 667536, and the theoretical income is 0.00000642/T/day.

The computing power of the entire ETH network is 343.882TH/s, the mining difficulty is 4431.63T, the current block height is 11721864, and the theoretical income is 0.00581859/100MH/day.

The BSV network computing power is 0.747EH/s, the mining difficulty is 0.11T, the current block height is 671469, and the theoretical income is 0.00120491/T/day.

The computing power of the BCH network is 1.958EH/s, the mining difficulty is 0.26, the current block height is 671862, and the theoretical income is 0.00045975/T/day. [2021/1/25 13:23:58]

Below in this article, we provide an update on how Bitcoin halvings have affected supply and demand over the past eight years. In our April 2020 investor letter, we used the S2F ratio to predict that Bitcoin could reach $62,968 this week. The bitcoin price has really arrived.

In our December 2020 investor letter, we focused on supply and demand.

News | Golden Finance survey confirms that "SEC approves bitcoin ETF news" as April Fool's Day news: After Jinse Finance investigation, the Financemagnates website, which first released the news of "SEC suddenly approved the issuance of Bitcoin ETF", has changed the headline of the news to confirm that "Bitcoin ETF Coin ETF passed" this news is April Fool's Day news. (The picture below is a comparison screenshot of the news before and after the Bitcoin surge)[2019/4/2]

A Tiger Cub friend/TMT investor: "We don't invest in Bitcoin because it has no cash flow." 

Me: "Well, EUR/USD has no cash flow either, but no one thinks twice about these EUR/USD trades either."

How is Bitcoin valued?

The answer is: Bilateral exchange rates are simply a matter of supply and demand. the

I realize that for some people this is not a satisfactory answer.

We look at it from both sides of supply and demand. First, the supply and demand diagram from Introduction to Economics (Econ 101):

Golden Relativity | Lianbo co-founder Bai Xiaojun: STO dividends have nothing to do with 99.9% of the currency circle projects: In this issue of Golden Relativity, Bai Xiaojun, a lawyer from New York State and China, and co-founder of Lianbo North America, said, "STO dividends It has nothing to do with 99.9% of the currency circle projects.” First of all, the so-called global liquidity is a beautiful dream, and the significant growth of liquidity in the primary market is not easy because it involves the compliance of the laws of the host country, and the secondary market must follow The rules of the traditional stock trading market; second, investors are no longer "leeks", the market will belong to participants with more resources and funds, and the old forces of traditional finance will also hinder the development of emerging financing methods; third, STO promotes The allocation of physical assets from the virtual to the real also requires more follow-up overseas compliance operation and maintenance costs, which puts forward higher requirements on the ability of the project to operate internationally; fourth, the risk of criminal prosecution and civil compensation. If the initiator of the project does not have good legal knowledge and a team of lawyers, issuing STO in the United States is not a good solution, because some marketing methods that are common in China, such as exaggerating the company’s financing amount, may constitute a violation of the US securities law. legal liability for fraudulent acts. A recent case is that Tesla CEO Elon Musk tweeted that he planned to take Tesla private and was sued by the SEC for misleading investors (Misleading Investors), and then settled and compensated 20 million US dollars and resigned from the company. The post of director. [2018/11/8]

We've seen two huge shifts -- one on the demand side and one on the supply side -- both moving up.

Jinse Finance Live Report Tencent Financial Technology Senior R&D Director: Blockchain is currently in its infancy: Jinse Finance live report, at the 2018 Big Data Industry Summit, Tencent Financial Technology Senior R&D Director Li Maocai said that the blockchain is currently in its infancy and still faces challenges. There are many challenges, such as bottlenecks in complex networks, node books, and performance. At the same time, there are many challenges in security threats, privacy protection, key management, transparent operations, and big data storage. [2018/4/19]

On the demand side, there are already big players like Morgan Stanley and PayPal entering the market. This shifts the demand curve higher. the

Meanwhile, Bitcoin is halved every four years. Following the bitcoin halving last May, the supply of newly issued bitcoins was cut in half.

The demand curve didn't just shift once, it has shifted for a decade as new entrants discovered Bitcoin.

Below is the normalized log price plot. The x-axis is the number of bitcoin users.

There are currently 3.5 billion people in the world with smartphones, and a smartphone is the only requirement to use Bitcoin. In the long run, there's no reason most people wouldn't use Bitcoin. Asking for nothing more than sharing a photo on Facebook. the

Jinse Finance’s exclusive analysis requires unsupervised “special zones” to be unrealistic: Korean people’s petition to establish a blockchain “special zone” seems reasonable, but demanding “no supervision” is too unrealistic. Jinse Finance’s exclusive analysis, first of all, the number of 3,500 people is far from representing the blockchain industry, let alone representing the voice of the general public. Governments can create a good policy environment for blockchain, but only if there is regulation. People are familiar with the dialectical relationship between freedom and rules, and they should know that the so-called absolute freedom does not exist. A state of disorder without rules can only be counterproductive. Such a petition has no practical effect except for propaganda to some people. There is no practical benefit to the development of the blockchain. At the same time, when Japanese and Korean industries generally seek self-discipline to show the government that they abide by the rules, this call for "no regulation" is really too individual. [2018/4/16]

Using these relationships, we can speculate on the likely ultimate value of Bitcoin. If it continues to rise at $200 per million users, the price of Bitcoin will reach $700,000.

At this price level, the total market value of Bitcoin will reach 15 trillion US dollars, accounting for 15% of the global M2 %. This seems totally doable.

And this is Bitcoin, and Bitcoin is just a representation of the blockchain. There are many other blockchains with important, and often quite different, use cases.

When investors ask "should I buy Bitcoin?", I say "yes". When they asked if they should buy other tokens, I said yes. The critical first step is to act, to stake something in the blockchain. the

Bitcoin is a credible poster child for the disruptive innovation of the blockchain. But that's not all. Bitcoin accounts for about half of the industry's market capitalization, but could be less than half in the future. the

In previous letters, we have demonstrated that Bitcoin may rise a lot, but Ethereum may rise even more, and Polkadot may rise even more. And we are most optimistic about DeFi and other projects built on Ethereum and Polkadot. the

Part of the reason is that some small-cap stocks outperform large-cap stocks in a bull market. Most of the other reasons we have discussed elsewhere.

We wrote in our letter to investors in January that Bitcoin and Ethereum accounted for 84% of the market capitalization. The sum of all other 5000 items is only 16%.

It's happening now. This is easily shown in the image below.

Over the past three months, the non-Bitcoin+Ethereum market share has more than doubled, from 16% to 34%. the

Follow this space. It is where the greatest benefit lies.

The Pantera Liquid Token Fund currently has non-Bitcoin + Ethereum positions accounting for 70%.

Despite its "frenzied" rally, Bitcoin's share of total market capitalization ("Bitcoin Percentage") is falling. They are a decent asset class when their 7x market cap products lose market share.

This brings up a very important point for institutional investors: being long Bitcoin or Bitcoin and Ethereum is an important first step. But active-zce management can add huge alpha.

The power of active-zce management is showing in Pantera's hedge fund returns. Actively managed funds outperform even Bitcoin’s stellar performance. the

Bitcoin money supply is fixed (100% no quantitative easing). A fixed number of bitcoins are issued every ten minutes. Every four years, this "block reward" is cut in half. Until 2140, when Zeno's paradox ceases, a total of 21 million bitcoins will be issued. When Bitcoin first appeared, 50 BTC were generated every ten minutes, then 25 BTC, 12.5 BTC, and last May the reward was cut to 6.25 BTC. Since supply shortages require high prices to balance, each halving has historically resulted in a significant increase in price.

In the April 2020 investor letter, we predicted that Bitcoin might reach $62,968 this week. The bitcoin price has really arrived. the

NFT is gradually being accepted by the mainstream of society. A skit also popped up on SNL recently to explain the concept in the form of a parody of Eminem's "Without Me." Kate McKinnon impersonates Treasury Secretary Janet Yellen. the

A non-fungible token is a cryptographic tool that can be used to create a unique digital identity. Non-homogeneous parts mean that they cannot be replaced with identical items and are provably scarce. This is a huge change from other digital media, allowing unlimited reproduction at little or no cost.

The flagship use case for NFTs is digital art and collectibles. Creators can tokenize and sign digital art, which can then be sold as NFTs on various digital marketplaces. Digital art collectors can buy and exchange these works on marketplaces such as MakersPlace, OpenSea, SuperRare, Rarible, etc., thereby fostering an active-zce digital art community in cryptocurrency.

The NFT space will continue to grow in 2021, thanks to mainstream attention to cryptocurrencies, better developer platforms and NFT tools, and a thriving community of digital creators. In February 2021 alone, NFT transactions reached $340 million, surpassing the entire transaction volume of 2020. As our digital identities (and with them digital ownership) grow in importance, NFTs will change the way we create and exchange value on the internet.

Pantera also said in the letter that the Pantera hedge fund accepts new investments at the end of each month. The Pantera Bitcoin Fund accepts new investors on any banking day in the US. All Pantera funds are now open to non-US investors.

Original link: five-orders-of-magnitude


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